Hi Chagsy, Because the share market looks forward I use an estimate for gross revenue for the next 12 months (more or less). My first preference is to use any company guidance where given. This could be a six month guidance rather than 12 but I will attempt to estimate the 12 months. Where there is no helpful guidance from the company then I will come up with my own estimate based on any research that I can find along with my own assessment applied on top of that. Calculating the revenue per share is as simple as taking the estimated gross revenue and dividing by the current number of shares. What I prefer to track, however, is the revenue at margin. Often the company states its operating margin and so I apply this percentage to the gross revenue and then divide the answer by the number of shares. Otherwise, we have to try and work out what that the margin is, from other info in the accounts. However, since I am not an accountant, I am a bit reluctant to say say how to do this. When there is no declared margin then I may look at a range of margins to see how the relative value of the company of interest compares to other high growth but profitless enterprises. One company I have on my watch list is so overvalued that even with a 100% margin (impossible, I know) the company still exceeds the metric for the next most expensive company on my list. Margins vary alot from company to company. On my current list of company declared margins, they go from 14% to 83% and so this is an important factor to take into account when comparing companies. However, the "revenue at margin per share" enables this comparison.
PPH Price at posting:
$2.95 Sentiment: Hold Disclosure: Held