Price to Earning (P/E) ratio - of a stock is often called "earnings multiple" or simply "P/E". It is a measure of how expensive a stock is. It compares the current market price of a share with earnings per share, to evaluate the income possibility of a stock.
P/E ratio= Price per Share\Earnings per Share
where Price per Share is a market price of a single share and Earnings per Share is the net income of the company, usually for the last 12 month period, (also can be projected value for the next 12 month). It is a net income of a single share for the last 12 month period.
Price/Earning to Growth (PEG) - is a ratio used to determine stocks potential value while taking the company's expected future growth.
Peg Ratio= (P/E ratio) \ Growth
Generally speaking, the lower the PEG Ratio is, the investors are paying less for each unit of a stock. Every ratio around 1 is a good value, between 1 and 2 is considered to be normal.
Disadvantage of this ratio is in projection of future growth rate, which can change due to many factors.
People Pill - A defensive strategy, similar to poison pill, when entire management of target company threatens to quit their jobs in the event of hostile takeover threat.
Price to Book Ratio - is a financial ratio used to compare book value of a company to its market value. The calculation could be done in two ways, either for the whole company or using per share values. The calculation value is the same, nevertheless.
Price To Sales Ratio - is calculated dividing a current price of a stock by company's revenue per share for the past 12 months. It is used to determine the value of a share relative to its performance in the past fiscal year.
Profit Margin - is a measure of profitability of a company, calculated from net income divided by revenues.
Profit Margin= Net Income \ Net Sales Revenue
It is expressed as a percentage, telling you the ability of a company to control costs. If a profit margin is, for example, 20 %, it means that company earn 0.2 $ on every $ invested.
Relative strength - rates the performance of every stock listed on the three major U.S. exchanges. The rating system gives a numerical grade to the performance of a stock over the past 12 months, assigning a grade of 1 to 99. Thus, relative strength is a momentum indicator. A relative strength of 95, for example, indicates a wonderful stock that has outperformed 95% of all other stocks over the past year.
It is calculated by dividing the price performance of a stock by the price performance of an appropriate index for the same time period.
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