Financial Ratios


Investment Valuation Ratios

Price Book Value Ratio StockPriceperShareEquityperShare\dfrac{Stock Price per Share}{Equity per Share} - The price-to-book value ratio, expressed as a multiple (i.e. how many times a company's stock is trading per share compared to the company's book value per share), is an indication of how much shareholders are paying for the net assets of a company.
Price Cash Flow Ratio StockPriceperShareOperatingCashFlowperShare\dfrac{Stock Price per Share}{Operating Cash Flow per Share} - The price/cash flow ratio is used by investors to evaluate the investment attractiveness, from a value standpoint, of a company's stock.
Price Earnings Ratio StockPriceperShareEPS\dfrac{Stock Price per Share}{EPS} - The financial reporting of both companies and investment research services use a basic earnings per share (EPS) figure divided into the current stock price to calculate the P/E multiple (i.e. how many times a stock is trading (its price) per each dollar of EPS).
Price Earnings to Growth Ratio PriceEarningsRatioExpectedRevenueGrowth\dfrac{Price Earnings Ratio}{Expected Revenue Growth} - The PEG ratio is a refinement of the P/E ratio and factors in a stock's estimated earnings growth into its current valuation.The general consensus is that if the PEG ratio indicates a value of 1, this means that the market is correctly valuing (the current P/E ratio) a stock in accordance with the stock's current estimated earnings per share growth. If the PEG ratio is less than 1, this means that EPS growth is potentially able to surpass the market's current valuation. In other words, the stock's price is being undervalued. On the other hand, stocks with high PEG ratios can indicate just the opposite - that the stock is currently overvalued.
Price Sales Ratio StockPriceperShareRevenueperShare\dfrac{Stock Price per Share}{Revenue per Share} - The P/E ratio and P/S reflects how many times investors are paying for every dollar of a company's sales. Since earnings are subject, to one degree or another, to accounting estimates and management manipulation, many investors consider a company's sales (revenue) figure a more reliable ratio component in calculating a stock's price multiple than the earnings figure.
Dividend Yield DividendperShareStockPriceperShare\dfrac{Dividend per Share}{Stock Price per Share} - Income investors value a dividend-paying stock, while growth investors have little interest in dividends, preferring to capture large capital gains. Whatever your investing style, it is a matter of historical record that dividend-paying stocks have performed better than non-paying-dividend stocks over the long term.
Enterprise Value Multiplier EntrepriseValueEBITDA\dfrac{Entreprise Value}{EBITDA} - Overall, this measurement allows investors to assess a company on the same basis as that of an acquirer. As a rough calculation, enterprise value multiple serves as a proxy for how long it would take for an acquisition to earn enough to pay off its costs in years(assuming no change in EBITDA).
Price Fair Value StockPriceperShareIntrinsicValue\dfrac{Stock Price per Share}{Intrinsic Value} - Helps investors determine whether a stock is trading at, below, or above its fair value estimate,A price/fair value ratio below 1 suggests the stock is trading at a discount to its fair value, while a ratio above 1 suggests it is trading at a premium to its fair value.