Category: Eco. Adm & Financial Mngt II Year (Video)

This Video is based on Ratio Analysis, Price Earnings Ratio and debt equity Ratio, Price earnings ratio deals with the share market and to calculate it we have to divide Market price with Earning Per Share (EPS) by calculating EPS we can conclude whether the share is Overvalued or undervalurd.EPS is a Quality phenomenon which means Earning available for the share holders so profit, Interest, Taxation are the Funds available for the shareholders. Always the Increased EPS is preferred while purchasing the share. Debt equity Ratio indicates the higher risk and vice versa it depends upon the Nature of the Industry and In order to calculate risk position we have to work on Debt equity ratio.

This lecture is delivered by Ms.Shaziya Naz, Asst. professor of biyani Girls College. The video is about Net income Theory of capital structure. Acc to this theory a firm can increase the value of the firm and reduce the overall cost of capital by increasing the proportion of debt capital in its capital structure to the maximum extent . Acc. To this theory value of the firm can be calculated by the following formula :

Total Value of the firm = Market value of Equity + Market value of Debt