Valuation Ratios

Valuation Ratios

Valuation ratios help in accessing the intrinsic value of the company. Most often used as part of Corporate Finance,valuation ratios help in determining if the company’s stock price is overvalued or undervalued ( Both in absolute sense and relative sense) .

Below are the important valuation ratios we will learn as part of this resources.

Click on each ratios to learn their meaning, formula along with examples, interpretation and real life application

  • Earnings per share

    Low EPS indicates for each share outstanding the company generates lower earnings. This discourages ..

  • Price to earnings ratio

    High P/E ratio could mean that a stock’s price is high relative to earnings and possibly overvalued…

  • Price to earnings growth ratio

    High PEG ratio indicate that the stock’s current market price is high relative to its earnings growth and..

  • Dividend Payout Ratio

    High payout ratio may indicate that the company may not have projects so that it can retain and invest earnings..

  • Dividend Yield ratio

    High dividend yield ratio indicates that investors earn higher return by purchasing the stock. It is generally …

  • Price to Cashflow ratio

    High price to cash flow ratio indicates that the company’s stock is overvalued. Low price to cash flow ratio indicates that the ..

  • Price to sales ratio

    High price to sales ratio indicates that the company’s stock is overvalued because for each dollar of sales, we are paying higher price..


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