`Determinations of Stock Price

`Determinations of Stock Price

Las Vegas is the well known place for gambling, where people go and gamble their money. Most of them are play based on superstition or luck. However, not many use some other strategies to increase the number of chips by figuring out the ratio of between lower cards and Aces and 10s. Stock market is like the majority of Blackjack players but somehow similar to those people who use Card Counting. In stock market there are countless methods of figuring out where the stock is going, why, and by how much. Those methods can be starting from the number of people lining up on a store door before its opens, to a very complicated calculation method. This is the big different between gambling and stock market. All aspects of a company play an important role in determining stock price. Therefore, each company has its favorable why of determining its stock price. John Richels- president of Devon Energy said determining what variable drive stock price is not the same in all businesses. The way the business operates, what the business produces, is it a manufacture business or a service business, and so on are the clue to what to choose. The aim of this paper is to point out the major player in stock market to determine stock price.

First of all the financial information, it is the most important type of information to determine a company’s valuation. The major players are a company’s earning, revenues, balance sheet, income statement and the cash flow statement. The very critical information as Professor Herbert Kaufman says are the earnings of a company meaning its profitability and revenue of the company meaning how a company’s is successful in selling its products.

To determine earning we will be using price over earnings ratio. The P/E ratio means how many dollars you are paying for each dollar of a company’s earning. For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per...