CHAPTER EIGHT

Market Performance Measurements

THIS CHAPTER COVERS THOSE measurements that are of most use to outsiders who are reviewing a company's market performance. It covers not just the popular price/earnings ratio, but also other issues that affect earnings on a per-share basis, such as several variations on the stock options to common shares ratio. It also addresses several capital-based measures, such as market value added and the cost of capital, which are driven by the equity and debt markets' perception of a company's valuation. The measurements discussed in this chapter are:

Insider Stock Buy-Sell Ratio Institutional Capture Rate Market Value Added Enterprise Value/Earnings Ratio Stock Options to Common Shares Ratio

Cost of Capital Sales to Stock Price Ratio Price/Earnings Ratio Capitalization Rate