Page 177 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes Return on Assets (ROA): Similar to ROIC, ROA, expressed as a percent, measures the company’s
ability to make money from its assets.

Return on Invested Capital (ROIC): This valuation technique measures how much money the
company makes each year per dollar of invested capital.

Stock valuation: Stock valuation is the method of calculating theoretical values of companies
and their stocks.
Stock verification: Stock verification is a process of physically counting and checking inventory
in the unit, against its book balance at least once in a year.

9.6 Review Questions

1. What is Stock valuation?

2. Stock valuation is the method of calculating theoretical values of companies and their
stocks. Discuss.

3. What is fundamental valuation of stock?
4. Define the term P/E ratio.
5. What is Earnings per Share (EPS)?
6. What is Price Earnings to Growth (PEG) Ratio?

7. What is Return on Invested Capital (ROIC)?
8. What is Return on Assets (ROA)?

9. What is Market Cap?
10. What is Enterprise Value (EV)?
11. What is EV to Sales?
12. What does EBITDA stands for?

13. ‘Stock verification is a process of physically counting and checking inventory in the unit,
against its book balance at least once in a year.’ Discuss.

Answers: Self Assessment

1. valuation 2. intrinsic
3. prediction, convention 4. stock prices
5. Price to Earnings Ratio 6. True

7. False 8. True
9. False 10. True
11. Receivables 12. Purchaser

13. short-term 14. current asset
15. account receivable

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