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Financial Ratios - Investment Ratios

earnings-per-share Earnings Per Share (EPS)

Here are some of the most commonly used financial ratios among stock market investors to help them evaluate stocks.

Price-Earnings Ratio (P/E)
The EPS figure gives investors an idea on the company’s performance and shows how much money a share of stock earned or lost as a result of selling goods and services. This is one of the figures used in calculating a company’s P/E Ratio.

Price/Earnings Growth (PEG) Ratio
Price to Earnings ratio is probably the most commonly used and most well known ratio when it comes to evaluating stocks.

Price/Cash Flow (P/CF)
The PEG Ratio is similar to the PE Ratio, but it takes it one step further by accounting for future earnings growth.


Price-to-Sales (P/S)
Price/cash flow ratio is another investment valuation ratio used by investors to evaluate the attractiveness of investing in a company’s shares.


Price-To-Book Value (P/BV)
The P/S reflects how much investors are paying for every dollar in annual sales. Essentially, the P/S number reveals the value placed on sales by the market.


Dividend Yield
The Price-To-Book Value ratio compares a stock’s market value to its book value. The P/BV ratio gives an idea on how much the company would be worth if the company was broken up and sold everything off.
The dividend yield is a percentage figure that investors use to determine what a stock pays out to shareholders in dividends.