Magic Numbers: The 33 Key Ratios That Every Investor Should Know
Author: Peter Temple
List Price: $29.95
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ISBN: 0471479241
Publisher: John Wiley & Sons (14 December, 2001)
Sales Rank: 91,379
Average Customer Rating: 4 out of 5
Customer Reviews
Rating: 4 out of 5
Magic Numbers De-Mystified
Peter Temple's MAG1C NUM8ERS is a straightforward introduction and useful reference tool for the serious investor on this topic. At the core of fundamental analysis are financial ratios that are essentially measuring tools for reaching a better understanding of a company's strengths and weaknesses. Temple's book manages to take some of the mystery out of these 'magic' numbers by assembling them in one place. Here we have an organized summary of thirty-three key financial ratios. With each one we get a) a definition b) the formula c) where we can find the numbers d) how the ratio can be calculated e) a specific corporate example and f) what relevance the measurement has for investors. The predictable organization of the book means it is an easy reference to flip open when we need to refresh our understanding of a useful ratio. Temple's observations about applying particular ratios to specific kinds of companies are helpful. I, for one, would like to have received more help in this area. Temple is British and many of his examples are drawn from companies US investors will not warm-up to such as Singapore Telecom, UK retailer Kingfisher, or the German utility company RWE. I'd recommend reading the book with the financial statements for a couple of favorite companies in hand to make the application of the ratios more relevant. Working your way through the jungle of numbers and verbiage for a company in which you have an investment with a few of Temple's ratios will contribute to an informed opinion of that business.
Rating: 5 out of 5
How to stay healthy
Magic Numbers does for the investor what chicken soup does for the common cold. it may not make you rich but it certainly will help you feel better.
Every real estate investor knows what IRR is and probably would not buy without it,ergo, why should a market investor ignore the tools available to help make prudent market investments. Imagine what would have happened had the Enron investors used these tools instesd of market tips from the so called Pros.
Read it, use it and its even better then chicken soup.
Rating: 3 out of 5
Mistakes Undermine The Book's Vredibility
As a fund manager, I find that this book is beneficial to people working in the investment community or even to individual investors. It provides simple understanding to 33 financial ratios that are commonly used in the industry such as PBV, PER, ROCE, EV/EBITDA, etc. Nevertheless, silly mistakes in the examples given in the book undermine its credibility as a whole. For examples, in Figure 1.1 (pg 6), the share price is supposed to be $2.5 (and not $125 million) and in Figure 1.2, the author confuses the readers with the number of shares (532,798,000 or 532,748,0000?). To a novice, these errors may cause futher confusion as it would be difficult for him to understand the concepts. The author and editor of the book should have done a better job, especially considering that the subject involves is "investment". Similar Products
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Book Index