# LinkNotions: the interactive visual calculator software

## Calculate the decision to buy a share

#### LinkNotions is a visual spreadsheet. With the software you can calculate and make decisions according to these calculations. This obviously taking into account your purchasing criteria.

First of all it is a question of evaluating a share. After this evaluation of the share, we can make a decision taking into account our criteria.

## Let’s take a simple example :

Suppose that according to your purchase criteria the share price must be significantly below the nominal value. The ratio “share price / nominal value of the share” must therefore be as small as possible.

A company has the following characteristics:

Nominal value of a share: 20

Share price: 10

We could deduce the following diagram:

We have selected a sample of 4 recommendations according to the value of the “price / nominal value” ratio (click on the “Purchase decision” square (A3) you will see it in the “Calculations” window).

• – purchase highly recommended (if the ratio is less than 0.35)
• – recommended purchase (if the ratio is between 0.35 and <0.8)
• – purchase not recommended (if the ratio is between 0.8 and <1.2)
• – purchase strongly discouraged (if the ratio is greater than 1.2)

As a LinkNotions diagram is interactive and the “Calculation” part can be modified online, you can try the diagram above.

Click in the diagram for example on the notion “Stock price” (A1). The “Calculations” window is opened and you see the amount “10” currently indicated in the “Main expression” field. Enter the amount 5, then press the “Enter” key or click anywhere in the diagram. Two things are happening:

• The value of the ratio (A2) goes from 0.5 to 0.25
• The purchase decision (A3) changes from “► purchase advised” to “► purchase highly recommended”.

Try with other stock values.

Now click on the notion “Purchase decision”. In the window “Calculations” you see on the left the different decisions and on the right the conditions for the decisions to apply.

You can modify these conditions according to your criteria. To return to the initial situation, click “reload” at the top right of the screen (the arrow in the form of a circle).

If you now want to create your own decision calculator, here’s how: How to create a decision calculator.

In this diagram we have used 6 criteria to decide the purchase of a share:

1. Price / Nominal value
2. PER (Price Earning Ratio)
3. PER / growth
4. Market capitalization / Turnover