Ownership ratios

Ownership ratios assist the stockholder in analyzing present and future investment in a company. Stockholders are interested in the way certain variables affect the value of their holdings. The ratios compare the value of the investment with factors such as debt, dividends, earnings, and the market price of the stock. By understanding the profitability and liquidity ratios, the owner gains insights into the soundness of the firm's business activities. By investigating ownership ratios, the stockholder is able to analyze the likely future market value of the stock. There are some ratios under this norm. They are as follows:

1. Earnings per Share (EPS)
2. Dividend ratio

Earnings per Share (EPS)

Stockholders are concerned about the earnings that will eventually be available to pay them dividends or that are used to expand their interest in the firm because the firm retains the earnings. These earnings may be expressed on a per share basis. Earnings per share are calculated by dividing net income by the number of shares outstanding. Shares authorized but not issued, or authorized, issued and repurchased (treasury stock), are omitted from the calculation.  

Earnings per Share (EPS) = Net income / NOSO


Ratio                                           2001              2000              1999             1998                1997    
Earnings per Share (EPS)      13.27 Taka      13.36 Taka      9.60 Taka     7.79 Taka       4.84 Taka

Analysis
Due to the decrease in net income in the year 2001 EPS has decreased. But in previous we see that there was a continuous increment of EPS till 2000. If company can control all sorts of expense it will be high again.

Dividend Ratios

The common stockholder is very concerned about the position taken by firm with respect to the payment of cash dividends. If the firm is paying insufficient dividends, the stock is not attractive to investors desiring some current income their investment. If it pays excessive dividends, it may not be retaining adequate funds to finance future growth. To pay consistent and adequate dividends, the firm must be liquid and profitable. Without liquidity, the firm cannot locate the cash needed to pay the dividends. Without profits, the firm does not have sufficient retained earnings to in dividend declarations.

Dividend per share = Dividend / NOSO

Ratio                                 2001              2000              1999             1998           1997     
Dividend per share      4.40 Taka        3.99 Taka        3.99 Taka     3.80 Taka   3.00 Taka

Analysis
The company is following to pay more dividends to attract investor to invest in their company. But this strategy is not good because for the company for all time. In 2001 their EPS decreased but Dividend per share has increased and it will be a reason for decrease in cash balance. Instead of paying more dividends they should pay more attention in earning per share.