Price to earnings ratio is calculated byP/E ratio = (Market Price per share/ Earnings per share).PE ratio value varies from industry to industry.
Price to book value (P/B ratio can be calculated using this formula:P/B ratio (Market price per share/ book value per share)As a thumb rule, a company with lower P/B ratio is undervaluedcompared to the companies with higher P/B ratio.
Price/Earnings to growth ratio can be calculated using this formula.
PEG ratio = (PE ratio/ Projected annual growth in earnings) This ratio is considered to be more useful than PE ratio as PE ratio completely ignores the company growth rate.
EV/EBITDA is a good valuation tool for companies with lots of debts.
Here, EV = (Market capitalization + debt-Cash) &
EBITDA - Earnings before interest tax depreciation amortization
The stock's price/sales ratio (P/S) ratio measures the price of a company's stock against its annual sales.
It can be calculated using the formula: P/S ratio = (Price per share/ Annual sales per share)
Dividends are the profits that the company shares with its shareholders as decided by the hoard of directorsDividend yield can be calculated as: Dividend yield = (Dividend per share/ price per share)
Dividend payout tells you the percentage of the profit distributed as dividend It can be calculated as:
Dividend payout = (Dividend/net income)