Hence, te company has sufficient prospect of growth. Pice/ Book value: Tis ratio represents a comparative measurement and relationship between market price of the stock and its book value. Esentially, i represents the proportion of company’s net assets that is accessible to the shareholders with respect to aggregate sale value of its stock. Te benchmark for P/B ratio is 1 and any stock value less than that expresses undervaluation. Te P/B ratio of the company and that of the industry shows that both the stocks are overvalued, wile the industry is higher.
Te P/B ratio of the company illustrates that in case of solvency of Qatar Islamic Insurance Company, te stock will be valued at 3.84 times of net asset value of the company (Alexander 105-150). Pice/ Cash flow ratio: I represents the stock price with respect to cash flow per share. Te P/CF ratio is an important indicator of the valuation of stock. Wile a single-digit value is considered as under-valuation, hgh values shows potential over valuation. Te respective P/CF ratios for QIIC and the industry and 63.
Tis implies that both have the propensity towards over valuation. Erning yield: Te earning yield ratio determines whether assets are optimally allocated. Te ratio shows percentage of every QAR earned by the company that has been invested in the stock. Te earning yield ratio of QIIC is higher than that of the industry, wich signifies that it is performing better than overall industry (Alexander 105-150). Dvidend yield ratio: Dvidend yield can be defined as return on investment per share. I is the ratio of dividend amount by QIIC to its shareholders annually with respect to its share price.
Te dividend yield ratio of the company is comparatively high, wich shows that it pays better dividend over other companies in the industry. Pyout ratio: Te dividend payout ratio illustrates the relationship between earning and dividend paid per share. I general, alow payout ratio is considered better for a company so that it does not pay more than net income. Te ratio analysis of QIIC and that of the industry represents that QIIC has a tendency pay high to shareholders.
Nt Profit Margin: Te net profit margin ratio is a useful measure to indicate profitability of a company with respect to other companies in the same industry. Ahigh net profit margin indicates greater profit and better control over cost. Te.. .
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