Evaluation Ratios Flashcards
1
Q
Book Value Per
Share
Measures the amount of net assets available to the shareholders of a given type of stock.
A
Equity
/Shares Outstanding
2
Q
Market to Book
Ratio or Price to
Book Ratio
Measures how high is the shares’ market price in relation to book value. Well managed firms should sell at high
multiples of their book value.
A
Market Price per Share
/Book Value per Share
3
Q
Price Earnings
Ratio
Measures the relationship between the
shares’ market price and earnings per
share. Growth companies are likely to have high PE ratio.
A
Market Price
/Earnings per Share
