/How to value a stock before buying it? Here are 9 ratios that can guide you
InvestmentSeptember 7, 2020

How to value a stock before buying it? Here are 9 ratios that can guide you

Since sales are generated using entire capital, including debt, this gives better picture than price / sales ratio.

Synopsis

Retail investors are rushing to open new demat accounts to trade in the stock market. However, new retail investors should know the basic ratios used to value stocks before they jump in to invest. Here is a look at how you can use nine such ratios while buying a stock.

There appears to be a rush to open new demat accounts and the daily volumes on the cash market crossed the Rs 1 lakh crore mark on 31 August. However, new investors should know the basic ratios used to value stocks before they jump in. ET Wealth explains how to use these tools.PE = Share price/Earnings per share (EPS)What does it tell you?What the market is willing to pay for a stock based on its past or future earnings. Lower the PE, cheaper

BY

ET Bureau

5 mins read, Last Updated:

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