REFS is
a mine of invaluable information for the private investor.
Selecting shares without its help is like trying to
clap with one hand tied behind your back.
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Selecting the scale factor
The scale factor expresses the height ratio of
the vertical share price scale, and this in turn is the ratio
of the upper extreme of the scale to the lower extreme. For
example a scale ranging from 200p down to 50p has a height ratio
of 4:1, which is equivalent to a scale factor of 4.
The scale factor is selected so that in the first
instance the graph scale can accommodate the highest and lowest
values to be plotted. The scale factor is then increased (i.e.
the scale is then compressed) to a value of at least four (or
a higher value if necessary e.g. 8, 16, 32, 64, 128) to ensure
that the majority of graphs in Company REFS can be directly
compared with each other.
If, for example, a share price fluctuated between
200p and 300p, it would be represented on a graph with a vertical
scale ranging from 200p, the minimum value, to 800p, which is
the minimum value multiplied by four.
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