Make sense of the numbers

Great! You want to analyze a stock that somebody at work was talking about. Well this is how you check it out. Your friend was talking about Bank of America. One of the largest banks in the country. Here is how you would look at the basics. If you have access to Yahoo!  on the left side you will see "Finance". Click on this. It will open a new page that will have a search box. You can search when you know the symbol for the stock. Every company that is traded in a stock exchange has a symbol. If you don't know the symbol, don't worry. The search box has a handy dandy way in which you can find it. Key in " Bank of America' in the box. It will offer different choices. Click on the correct entry. Then click on "get quotes". Now you will see a page that has a lot of numbers. We will try and explain all the numbers.

Last trade is the price paid on the last trade. When the markets are open this will keep changing. The next item is change over the previous day close. The next item is the actual price paid on the closing transaction of the previous day.

You have a 1 year target estimate. This is what the analysts think that this stock will be worth one year from today. They don't have a crystal ball and this might change.

On the right side you will see the dais's range and the 52 week range. This is important. This tells you where the stock is trading vis a vis 52 weeks history. 52 weeks is one year.

You don't want to buy the stock when it is quoted at near the 52 week high, unless you have compelling reasons. Similarly, you don't want to buy when it is close to the 52 week low unless you have very food reasons.

The next item is market cap. This is the value arrived by multiplying all the shares outstanding by the market value of one share- basically what the company is worth, based on the market.EPS - by far a very important statistic. This shows what the company earned per share last year. If you see a number say 3.30, it means the company earned $3.30 on every share. This number is derived by dividing the profit after tax by the number of shares outstanding. You also have information on Dividend and the yield. You see a figure like this  $2.56(6.80%) - means the company paid a dividend of $2.56 on every share. This gives you a yield of 6.80% per year, if you buy at this price and get this dividend.