Awards Are Important.

week or so, companies are added or removed from the list. Occasionally the sub-groups themselves are changed (which partly explains the missing numbers). After each group or sub-group name and number, another number in brackets indicates how many companies constitute the group or sub-group.

There are about 730 companies that make up the all-share index.

The indices were each introduced at 100 on 10 April 1962 (or when the sub-group was first constituted if later). The Financial Times states that the indices are compiled 'through the use of elegant and complex mathematical formulae'. This elegant complexity gives arithmetic means (unlike the other indices) adjusted for companies leaving or joining sub-groups.

The information is presented daily in a big table which shows for each sub-group:

i the index number

ii the change since the previous index, expressed as a percentage,

iii estimated earnings yield (expressed as a percentage)

iv gross dividend yield (expressed as a percentage of the average yield dividend by the sector's market capitalisation, and grossed up assuming deduction of income tax at the basic rate),

v estimated P/E ratio. This is calculated as a weighted average within the group using only the 'net basis'for determining earnings per share. The 'net basis'gives a lower figure than the alternative 'nil basis'as it excludes tax which is irrecoverable because of the size of the dividend.

There are also comparative indices for each of the previous three days and for one year previously.

Every quarter, valuation tables are published which give market capitalisation figures for each sub-group, both as an amount and as a percentage of the whole market. The US used to have a .com index during the dot com boom, but this has since ceased after the bubble burst in 2001.

These indices allow you to discover how well your shares are performing by comparing them with others in the same

Next:

• Demack on How To Take Stock Of Your Company's Performance Distribution
• Demack on Financial Performance

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