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Reading the text from the website www.howtobooks.co.uk, one can obtain clear information of how shares can be used to measure a firm working capacity.
Shares are usually worth through their nominal value, which is equal to the value of their assets as well as the ability to create money once they are sold on the stock market. There is also another type of shares, named “A shares” or non-voting shares. These shares were created with the purpose of avoiding the founding families to have an excess of power. However, they are predicted to disappear because of the low demand by investors.
Another way of measuring the companies performance is through the assets, which are constituted by the liquidity, property and company’s stock of raw material and work-in hand less the borrowing or payments to creditors. The article also mentions the dividends that are defined as “proportion of its profits paid to the shareholders of the company”. Their profits can be given out to shareholders in the form of dividends, or internally become a way of finance by reinvesting them.
The price yield according to the Financial Times corresponds to 5713.9. The P/E ratio “measures how many years of earnings per share at the current share price are needed to pay for the share”. The last way of measuring the performance of a company is through the yield that is usually expressed as a percentage of the current share price. The average yield commonly varies among countries. The yield that is equivalent to the interest returned on bonds or building societies is lower than the interest given by the market. However, the willingness of taking a riskier investment could imply higher returns compared to other safer investments such as bonds.

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