1. Price to Earnings ratio The price to earnings ratio is one of the most widely used financial ratio analysis among the investors for a very long time. Price to Earning ratio= Price Per Share/Earnings Per Share As a thumb rule, a low P/E ratio is preferred while buying a stock. 2. Price to Book value Price to book ratio (P/B) is calculated by dividing the current price of the stock by the latest quarter's book value per share. Price to Book ratio=Price per share/Book value per share A lower P/BV ratio could mean that the stock is undervalued, but again the definition of lower varies from sector to sector. 3. Debt to Equity ratio The debt-to-equity ratio measures the relationship between the amount of capital that has been borrowed (i.e. debt) and the amount of capital contributed by shareholders (i.e. equity). Debt to Equity ratio=Total Liabilities/Total Shareholder Equity As a thumb of rule, companies with a debt-to-equity ratio more than 1 are risky. 4. Return on E...
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