Valuation Indicators

What are Valuation Indicators?

Valuation indicators are a group of numbers calculated for a stock with the aim of aiding decisions in the financial market.

As the name suggests, these indicators serve to indicate the state of a company, providing a simple estimate for interested investors to visualize. These indicators can be used to classify stocks and compare companies within the same industry, potentially signaling a positive or negative discrepancy.

What are the key Valuation Indicators?

• P/E Ratio (Price / Earnings)
• P/B Ratio (Price / Book Value)
• EPS (Earnings Per Share)
• BVPS (Book Value Per Share)
• Dividend Yield

What do the key Valuation Indicators Mean?

P/E Ratio (Price / Earnings)

P/E is used to measure how many times the market is willing to pay for a company's annual profit. It is one of the main valuation indicators and can indicate whether a company is cheap, expensive, profitable, and more.

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P/B Ratio (Price / Book Value)

P/B Ratio indicates the relation between a company's equity and its market value. This number can guide the investor regarding the asset's appreciation within a company.

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EPS (Earnings Per Share)

EPS represents the value obtained by dividing a company's net profit by the total number of its shares. It is used in conjunction with BPS in the Graham's Number Calculation.

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BVPS (Book Value Per Share)

BVPS represents the value obtained by dividing a company's book value by the total number of its shares. It is used in conjunction with EPS in the Graham Number Calculation.

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Dividend Yield

Dividend Yield is a percentage that relates the total amount paid in Dividends to the current stock price.

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