Using ratios to analyse companies

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19. Sources of information

You can get a company's report and accounts in a number of different ways:

1. By writing to or telephoning the company and telling them that you are thinking of investing and asking for a set of accounts. Some large companies have an investor relations department for this kind of thing. Others will put you onto the company's registrar. Usually they will send out the latest report and accounts free of charge.

2. By using the services of specialist companies. e.g. McKay Company Reports (0207 395 5711), Investor Communications Business (0208 974 0200) or by using the services run by various newspapers and magazines (e.g. Financial Times, Daily Telegraph, Investors Chronicle).

Alternatively, you can get summaries of key historical data:

1. By subscribing to various hard copy directories. Some, like REFS, published by Hemmington Scott (0207 496 0055) also have many of the important ratios calculated for you.
2. By using the services of various websites and online information providers.
3. By visiting one of the offices of the Registrar of Companies and researching their records.

1. Why bother with ratios? 2. A word of warning 3. The P&L and the balance sheet 4. Grouping the ratios 5. Profit margin 6. Return on capital employed (ROCE) 7. Sales as a multiple of capital employed 8. Stockturn 9. Debt collection 10. Payment of trade creditors 11. Cash-to-cash cycle 12. Gearing 13. Interest cover 14. Current ratio 15. Quick ratio (acid test) 16. Earnings ratios 17. Dividend ratios 18. Other ratios 19. Sources of information 20. Conclusion

• Magic Numbers