The supply and demand of raw materials, the interest level of bonds and the economic strength of a country in terms of currency, for example. In the case of shares, there are always a lot of financial key figures of the underlying company known, because publication is mandatory for participation in the stock market. In this article we look at equity (per share) according to the fundamental analysis of one of the most promising stocks like aandeel Apple.
Equity per share
Virtually every company is required to draw up an annual balance sheet, often audited by an accountant. The balance sheet also shows the shareholders’ equity. This is defined as the difference between all assets and liabilities of the company.
- By dividing the shareholders’ equity by the number of shares issued on the stock exchange, one can therefore also calculate the shareholders’ equity per share. Does this value also determine the price of a share, or is it at least influenced by it?
- The value is part of the fundamental analysis of a company and that in itself is of course self-evident. After all, if a company decides to stop its current activities, after selling all its assets and paying off its debts, equity should remain as the result. Of course, there are factors that in this case would cause the real return to deviate from the theoretical value that equity represents.
Finally, assets must also be valued for a balance sheet, whereas the real value will only become apparent
In addition, investors often choose companies precisely because of the activities they carry out and the results they achieve, and not because they want to see the company sold in parts. Equity is therefore only one of the factors considered in fundamental analysis. The equity per share provides, among other things, an indication of the financial strength of the company when the economy is not going well for a while. A company that shows a lot of equity per share in relation to the share price will be able to take a beating. The best example of this in our country is of course Shell, where the share price often remains very close to the equity per share.
Online investing with fundamental analysis
Financial key figures of all companies listed on the stock exchange are available to online investors. The online brokers are often also very complete on this point. If you feel addressed by fundamental analysis, these data are often very enlightening. One of the tips we can give you if you are in The Netherlands is starting with broker vergelijken to make sure you choose the right partner moving forward in your finance career.