INSTANT CALCULATION OF A STOCK'S POTENTIAL PAYBACK PERIOD (PPP)
AND INTERNAL RATE OF RETURN (IRR)
EVEN IF EARNINGS PER SHARE (EPS) ARE NEGATIVE (LOSSES) OR CLOSE TO ZERO
(0)
AND PRICE-EARNINGS RATIOS (PERs) THEREFORE NOT SIGNIFICANT
EPS < 0 or EPS ≃ 0
PPP = Potential Payback Period
P = Share price today
E0 = EPS for the current year (year 0)
E1 = EPS for next year (year 1)
E2 = EPS for the following year (year 2)
g = EPS growth rate (in %) starting year 2
r = Interest rate (in %) today
IRR = Internal Rate of Return
PPP = Potential Payback Period
INSTANT CALCULATIONS FOR SIMULATIONS ON A PARTICULAR STOCK
OR FOR EVALUATION AND COMPARISON OF SEVERAL
DIFFERENT STOCKS
| Stocks | P | E0 | E1 | E2 | g | r | PPP | IRR |
|---|---|---|---|---|---|---|---|---|
| Example 1 | 100 | 10 | 10 | 10 | 0 % | 0.0001 % | 10.00 | 7.18 % |
| Example 2 | 100 | 0 | 0 | 10 | 0 % | 0.0001 % | 12.00 | 5.95 % |
| Example 3 | 100 | -10 | -10 | 10 | 0 % | 0.0001 % | 14.00 | 5.08 % |
| A | % | % | - | -% | ||||
| B | % | % | - | -% | ||||
| C | % | % | - | -% | ||||
| D | % | % | - | -% | ||||
| E | % | % | - | -% | ||||
| F | % | % | - | -% |
P = Share price today
E0 = EPS for the current year (year 0)
E1 = EPS for next year (year 1)
E2 = EPS for the following year (year 2)
g = EPS growth rate (in %) starting year 2
r = Interest rate (in %) today
PPP = Potential Payback Period
IRR = Internal Rate of Return