6 Key Ratio while doing fundamental Analysis of Stocks

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What are Key Ratios while doing Fundamental
Analysis of Stocks
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Here Are A Few Key Ratios Which Can Help You In
Fundamental Analysis Of Stocks
FUNDAMENTAL ANALYSIS OF STOCK MARKET INVESTMENT
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Price-to-Earnings Ratio

• The price-to-earnings ratio is a very important
  ratio used in fundamental analysis of stocks as
  it can help you determine the market value of a
  stock compared to the companys earnings. It
  shows what the market is willing to pay today for
  a stock based on its past or future earnings.
• To know the ideal P/E ratio one can compare the
  current P/E with the companys historical P/E,
  the industry P/E and the P/E of the market.

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Price-to-Book Value Ratio

• The price-to-book ratio or P/BV ratio measures
  whether a stock is over or undervalued by
  comparing the net assets of a company to the
  price of all the outstanding shares.
• A P/BV ratio of less than one means that the
  stock is undervalued and value of assets on the
  companys books is more than the value assigned
  to it by the market.

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Return On Equity

• Return on equity (ROE) is an important measure
  in fundamental analysis of stocks as it denotes
  the return that shareholders get from the
  business and overall earnings. This is useful in
  comparing the profitability of companies in the
  same industry and is also a yardstick for
  measuring the managements capability to conduct
  the business efficiently. ROE can be calculated
  by dividing the net income by the shareholder
  equity.

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