Stock Price Reflect Market Value of CompanyCompanies Should Publish the full information for investors to Predict or improve a company’s economic criteria of value (stock price) and whether or not too high. Reviewed by Eduardo Luis Otero.

Modern finance company based on the premise that market value is the result of the financial valuation based on projections of future cash generation, arising from a business plan that fit with business strategy.

In other words, a company’s worth by their ability to generate cash to investors. In general, to estimate the stock price is subtracted from the total debt to market value, adding temporary investments and cash, and the value obtained is divided by the number of shares outstanding.

From an economic standpoint, We Can concludes that a stock is overvalued if the expectation value of the company’s internal below market expectations. This Suggests That market analysts must go beyond technical analysis and began to recommend based on the expected outcome and acquired by the company’s future and Hope that comes from a thorough knowledge about the sector and its growth potential.

It is therefore Important That companies, in Their annual reports, quarterly and on Their websites, publish information to the market to enable investors to Predict or improve a company’s economic criteria of value (stock price) and whether or not too high. Complete information not only refers to information PYG as sales and EBITDA, but investments in property companies, financial debt, the acquisition and key performance indicators, at least.

In Addition, Should investors keep in mind that the achievement of (large and ambitious objectives a) Mega the does not include the concept of profitability is not in tune with the philosophy of value. For example, if a company meets its sales targets or EBITDA, does not mean that is reflected in higher firm value or stock price higher, only create value Pals because the benefits of future investment is higher than the investment.

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