Research Team

The portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company’s profitability. Calculated as: When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the […]

The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company’s current market price to its book value. The calculation can be performed in two ways, but the result should be the same: 1. The company’s market capitalization can be divided by the company’s total book value from its balance sheet.

The PEG ratio (price/earnings to growth ratio) is a valuation metric for determining the relative trade-off between the price of a stock, the earnings generated per share (EPS), and the company’s expected growth. In general, the P/E ratio is higher for a company with a higher growth rate. Thus using just the P/E ratio would

Price-to-sales ratio, is a valuation metric for stocks. It is calculated by dividing the company’s market cap by the company’s revenue in the most recent year; or, equivalently, divide the per-share stock price by the per-share revenue. Unless otherwise stated, P/S is “trailing twelve months” (TTM), the reported sales for the four previous quarters, although

Instead of net income, the Forward P/E uses estimated net earnings over next 12 months. Estimates are typically derived as the mean of a select group of analysts (note: selection criteria is rarely cited). In times of rapid economic dislocation, such estimates become less relevant as the situation changes (e.g. new economic data is published,