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Python for Finance

You're reading from   Python for Finance If your interest is finance and trading, then using Python to build a financial calculator makes absolute sense. As does this book which is a hands-on guide covering everything from option theory to time series.

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Product type Paperback
Published in Apr 2014
Publisher
ISBN-13 9781783284375
Length 408 pages
Edition 1st Edition
Languages
Tools
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Author (1):
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Yuxing Yan Yuxing Yan
Author Profile Icon Yuxing Yan
Yuxing Yan
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Toc

Table of Contents (20) Chapters Close

Python for Finance
Credits
About the Author
Acknowledgments
About the Reviewers
www.PacktPub.com
Preface
Introduction and Installation of Python FREE CHAPTER Using Python as an Ordinary Calculator Using Python as a Financial Calculator 13 Lines of Python to Price a Call Option Introduction to Modules Introduction to NumPy and SciPy Visual Finance via Matplotlib Statistical Analysis of Time Series The Black-Scholes-Merton Option Model Python Loops and Implied Volatility Monte Carlo Simulation and Options Volatility Measures and GARCH Index

Working with DuPont identity


In finance, we could find useful information from a firm's financial statements such as annual income statement, balance sheet, and cash flow statement. Ratio analysis is one of the commonly used tools to compare the performance among different firms and for the same firm over the years. DuPont identity is one of them. DuPont identity divides Return on Equity (ROE) into three ratios: Gross Profit Margin, Assets Turnover, and Equity Multiplier:

The following code will show those three ratios with different colors. Here we have the following information about some firms:

Ticker

Fiscal Year Ending Date

ROE

Gross Profit Margin

Assets Turnover

Equity Multiplier

IBM

December 31, 2012

0.8804

0.1589

0.8766

6.3209

DELL

February 1, 2013

0.2221

0.0417

1.1977

4.4513

WMT

January 31, 2013

0.2227

0.0362

2.3099

2.6604

The Python code is as follows:

import numpy as np
import matplotlib.pyplot as plt
ind = np.arange(3)
plt.title("DuPont Identity")
plt.xlabel...
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