Magic Numbers: The 33 Key Ratios That Every Investor Should Know [Hardcover]

Peter Temple (Author)

Book Description

ISBN-10: 0471479241 | ISBN-13: 978-0471479246 | Publication Date: December 14, 2001 | Edition: 1

Quickly and accurately calculate key investment ratios
Written by a leading finance expert, this book offers simple explanations on how to calculate and interpret key financial ratios. This information is essential for the accurate assessment of a company's financial condition and the true value of its shares. This book is packed with many worked examples from actual company reports and readers will also find many online reference sources-including company Web sites and free software offers. Plus, this book features a supporting Web site at www.magicnumbersbook.com. Magic Numbers is essential reading for individual investors and non-financial executives.

Editorial Reviews

Amazon.com Review

In Magic Numbers, investment analyst Peter Temple provides a straightforward primer to calculating and interpreting 33 key investment ratios. The book is organized into five sections that explain market-based ratios (e.g., market capitalization, P/E ratios), income statement ratios (margins, earnings per share), balance sheet rations (price/cash ratio, burn rate), cash flow ratios, and risk and volatility ratios. Each chapter clearly shows the inputs necessary to calculate a particular ratio and explains its relevance in evaluating a company's performance. Recommended for serious investors. --Harry C. Edwards

Review

Book of the Week, "...investors online or otherwise who want to develop the skills used by financial analysts, will find it hard to go wrong with Magic Numbers." (Sunday Times, 13 January 2002)

"very good choice.... In just a few pages, each written and laid out with admirable clarity, Temple walks us through...financial measures.... I wish I had this book years ago." (BusinessWeek, February 11, 2002)

"...Magic Numbers elevates itself to more than a mere reference book - it becomes a modern day rallying cry for Enlightenment-style rationalism that would make even David Hume proud." (Portfolio International, February 2002)

"...website...does contain useful downloadable worksheets, calculators and links..." (Gulf Business, April 2002)

See all Editorial Reviews

Product Details

• Hardcover: 228 pages
• Publisher: Wiley; 1 edition (December 14, 2001)
• Language: English
• ISBN-10: 0471479241
• ISBN-13: 978-0471479246
• Product Dimensions: 10.3 x 7.3 x 0.9 inches
• Shipping Weight: 1.9 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #1,261,861 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

49 of 57 people found the following review helpful:

3.0 out of 5 stars Mistakes Undermine The Book's Vredibility, December 20, 2001

By 

Meor Khairi Bazid (Kuala Lumpur, Malaysia) - See all my reviews

This review is from: Magic Numbers: The 33 Key Ratios That Every Investor Should Know (Hardcover)

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".

5 of 5 people found the following review helpful:

5.0 out of 5 stars How to stay healthy, March 31, 2002

By 

frank Goldstein (San Diego, USA) - See all my reviews

This review is from: Magic Numbers: The 33 Key Ratios That Every Investor Should Know (Hardcover)

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.

4 of 4 people found the following review helpful:

4.0 out of 5 stars Magic Numbers De-Mystified, May 14, 2002

By 

dennis wentraub (schenectady, new york USA) - See all my reviews
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Amazon Verified Purchase

This review is from: Magic Numbers: The 33 Key Ratios That Every Investor Should Know (Hardcover)

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) 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 have received even 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 this 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 an investor owns with a few of Temple's ratios will contribute to an informed opinion of that business.