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Think of business logic as the pipes of a Web application, and the data associated with the application as the water that flows through them That is, business logic and application data go hand in hand For example, a ticket reservation system is meaningless without tickets to reserve, just as a banking application is meaningless without bank customers While data may not actually be part of the business logic, its existence gives the business logic a purpose and provides evidence of the value of that logic Data management has to do with reliable, fair, secure, and efficient access to the data We want to be able to store lots of data, access it quickly, and relate it to each other As we will discuss shortly, databases are the primary mechanism used to meet these requirements They enable the modeling of data (representation) and its persistence (reliability); they support transactions on that data (fairness and order); they provide security; and they are typically fast (efficiency)



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050 10 011 006 (b) Current earnings are $200 and g is 6 percent, so earnings per shareestimate = 200(106) = $212 (c) The future value of the stock is estimated as V1 = (EPSestimate) (P/Efuture) = $212 10 = $2120 (8) Compare this estimated value (end of year 1) of the stock to its market price to determine whether the stock should be bought or sold the price and ending dividend must be discounted by the required rate of return of 11 percent If the present value of the future stock price and dividend payment are greater than the current market price, the stock is undervalued and should be bought If the present value of the future stock value and dividend payments are less than the current market price, the stock is overpriced and should be avoided (9) There is a relationship between the P/E ratio and all components of the dividend discount model First, the higher the payout ratio, the higher the P/E Second, the higher the expected growth rate, g, the higher the P/E Finally, the higher the required rate of return, k, the lower the P/E The spread between k and g is the main determinant of the P/E ratio, but the dividend payout ratio does have an impact The expected (P0/E1) earnings multiplier is what should be used when valuing stocks, not the historical (P0/E0) ratio B Price/free cash ows (1) The price to cash ow ratio is de ned as the market value divided by per-share cash ow (2) This ratio is often used in conjunction with the P/E ratio, because emphasis is placed on growth in cash ows versus earnings; earnings are often subject to accounting manipulation, whereas cash ows are often more stable Cash ows are often used to predict nancial strength and potential problems C Price/sales (1) This ratio is de ned as the rm s stock price divided by its per-share sales (2) Advantages: The ratio is meaningful for distressed rms; sales gures are not as easily manipulated as earnings; less volatile than P/E multiples Disadvantage: It can distort valuation when earnings drop.





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Users of an application will access it via Web browsers, standard telephones, cell phones, or personal digital assistants (PDAs) Typically, all application functionality is accessible from Web browsers, but limited parts of the application can be accessible from the other interfaces as well We will focus on Web browsers, since nearly every application needs to deal with them, and will give selected attention to the other interface technologies All the while, our goal will be to avoid situations where we have to develop copies of either application data or functionality For example, we don't want to discuss how to build a great Web application whose functionality cannot be reused by a different interface such as a wireless or voice-response technology Although it's not a major focus of this book, there are ways to optimize your site so that it works better with one browser than with another Also, different levels of support for browser-dependent technologies, such as JavaScript, Cascading Style Sheets (CSS), and dynamic HTML (DHTML)

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Topic 46: Portfolio Management and Measurement Concepts - 153 (3) A low P/S ratio indicates low valuation, whereas a high P/S ratio indicates high valuation D Price/earnings/growth (PEG) (1) PEG is calculated by dividing the P/E ratio by the estimated earnings growth rate If dividends are signi cant, add the dividend yield to the growth rate when calculating the PEG ratio (2) It indicates the price the market placed on earning expectations 4 Intrinsic value A Intrinsic value is the underlying value that a careful evaluation would produce B An ef cient market would always price stocks at their intrinsic value; an inef cient market would not necessarily do so C Under the dividend discount model, the intrinsic value of stock is the present value of the stock s expected future dividends, discounted at the stock s required rate of return D If a stock trades above its intrinsic value, the stock should be sold If a stock trades below its intrinsic value, the stock should be bought 5 Book value A Book value is stockholder s equity divided by outstanding shares Stockholder s equity includes the sum of stock, additional paid-in capital, and retained earnings on a rm s balance sheet B Value investors pick stocks that trade below book value C The price/book value is de ned as the rm s stock price divided by its per-share book value (1) A low ratio suggests that a stock is undervalued; a high ratio suggests that it is overvalued (2) What is considered high or low is up to the discretion of the analyst, but should be used in comparison with other stocks It has become an important measure of relative value among stocks

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