History
Robert D. Coleman's Evolution of Stock Pricing notes that the invention of double-entry bookkeeping in the fourteenth century led to company valuations being based upon ratios such as price per unit of earnings (from the income statement), price per unit of net worth (from the balance sheet) and price per unit of cash flow (from the funds statement). The next advance was to price individual shares rather than whole companies. A price/dividends ratio began to be used. Following this, the next stage was the use of discounted cash flows, based on the time value of money, to estimate the intrinsic value of stock.
Read more about this topic: Share Price
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“The history of the past is but one long struggle upward to equality.”
—Elizabeth Cady Stanton (1815–1902)
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—Tacitus (c. 55–c. 120)
“It is the true office of history to represent the events themselves, together with the counsels, and to leave the observations and conclusions thereupon to the liberty and faculty of every man’s judgement.”
—Francis Bacon (1561–1626)