10.2.5—Investment ratios

Investment ratios such as earnings per share, dividend yield, dividend cover and price-earnings ratio relate shareholder returns or market price to profit and dividends.

They can support comparison, but market expectations, risk, growth prospects, payout policy and one-off earnings affect interpretation.

A high P/E may reflect expected growth rather than overpricing; a high dividend yield may reflect a falling share price or an unsustainably high payout.

Ratios do not predict future returns and should not be read without the underlying earnings and dividend context.