5 Ratios For Best Stock Picking Strategies For Investment

Advertisement

5 Ratios For Best Stock Picking Strategies For Investment

How to Pick Best Stock To Investments

With the market split between good but overvalued stock and poor but undervalued ones, here are five ratios you look up before you buy.

How to Pick Best Stock To Investments

1. PRICE TO EARNINGS RATIO

The most commonly used ratio, It compares the price of a stock to the company's earning per share (EPS). The EPS can be either for the past for quarters ( historical or trailing PE) or for the coming four quarters (Forward PE).

HOW IT IS DERIVED
Stock Price
𝄖𝄖𝄖𝄖𝄖𝄖𝄖  = PE
EPS

2. PRICE TO BOOK VALUE RATIO 

The ratio compares the price of a stock with its book value. The book value is the net value of the company's total assets minus its liabilities. In other words, It was shareholders will be left with if the company goes bankrupt.

HOW IT IS DERIVED
Stock Price
𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖   = PBV
Book Value Per Stock

3. PRICE TO SALES RATIO 

The ratio compares the price of a stock to the revenue earned par stock. The for the past four quarters it used in the calculation. 

HOW IT IS DERIVED
Stock Price
𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖   = PS
Revenue Per Stock


4. DEBT-TO-EQUITY RATIO

It measures a company's leverage by comparing its debt with its equity base, The ratio indicates the proportion of the company's assets that are being financed through debt.

HOW IT IS DERIVED
Total Long-Term Debt
                                    𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖   = Debt-Equity Ratio
Shareholder Equity

5. ASSET TURNOVER RATIO

The ratio measures the sales generated for every rupee worth of an asset.  it shows a firm's efficiency in using its asset to generated revenue.

HOW IT IS DERIVED
Revenue
                                    𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖𝄖   = Asset Turnover Ratio
 Total Assets

By: Mukesh Bangra

 <a href="http://www.freebiebitcoin.com">Earn free bitcoin</a>
Free bitcoin

Post a Comment

11 Comments

  1. Better understanding on stock market from this blog.
    Stock market tips

    ReplyDelete
  2. Thanks for this beneficial information. Every trader and investor wants to read these types of blogs. your information get helps to many traders and investor. Keep posting about multibagger stocks.

    ReplyDelete
  3. Excellent!! This One Blog Is Awesome, thanks for sharing this impotent InformationEquity Tips

    ReplyDelete
  4. Thanks for this Information.
    Download Latest & Updated IELTS, GRE, TOEFL, English Grammar and Other English Books from Unknown Way Searcher

    ReplyDelete
  5. This post is helpful to many people. stockinvestor.in is a stock related website which provides all stocks related information like new stocks and shares available in the stock market.
    equity capital
    capital gain

    ReplyDelete
  6. Fantastic. How do you do this that this blog is so good? For more info: how to select stocks

    ReplyDelete
  7. Nice article. stockinvestor.in shares information related to stock market like stock market analysis, advice the tips to invest in the stock market, and also provides stock market recommendations.
    Market capitalization
    Sensex index
    Capital Markets

    ReplyDelete

  8. My ex ruined me broke due to his incessant extravagant spending , I found myself in a big mess. I talked to a loan company and I was told that they can't lend me loan . I was devastated, that's put me into a lot of debt. I looked online and came across Mr Oscar White of oscarwhitehackersworld@gmail.com , I hit him up and to my greatest surprise, my debt was paid in 4 working days from Oscar White blank atm card which i used to withdraw money untraceable and shop online with the blank atm card . I was so amazed and it didn't cost me too much to get the card and today have made up to $50,000.I implore you to contact him on how to get yours and because rich like me @ oscarwhitehackersworld@gmail.com or whats-app +1(323)-362-2310.No doubt he's the best out there and your problems will be solved!

    ReplyDelete


  9. Cool way to have financial freedom!!! Are you tired of living a poor life, here is the opportunity you have been waiting for. Get the new ATM BLANK CARD that can hack any ATM MACHINE and withdraw money from any account. You do not require anybody’s account number before you can use it. Although you and I knows that its illegal,there is no risk using it. It has SPECIAL FEATURES, that makes the machine unable to detect this very card,and its transaction can’t be traced .You can use it anywhere in the world. With this card,you can withdraw nothing less than $4,500 a day. So to get the card,reach the hackers via email address : besthackersworld58@gmail.com or whatsapp him on +1(323)-723-2568

    ReplyDelete
  10. Great post This is very helpful to me and I was very impressed by your meaningful thoughts. Considering something really interesting about your blog, I saved it in Favorites.MCX commodity live rate in India

    ReplyDelete