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8 Stock ratios to be Considered before investing

Posted By On 11/01/2009 12:18:00 PM Under

Well investing in the stock market requires a lot of diligence and one can perform the same task by checking on the following ratios or else one can use our paid services for Delivery stock tips in Indian market and make money without any tension as all the homework is done by us to ensure ythat you get the highest returns.
The  ratios are as appended below:

1. Ploughback or Reserves

2. Book value per share

Shareholders' funds
------------------------------------------------ = Book Value per share
Total quantity of equity shares issued

3. Earnings per share (EPS)

Profit Post Tax
------------------------------------------------ = EPS
Total quantity of equity shares issued

4. Price Earnings Ratio (P/E)

Price of the share
------------------------ = P/E
Earnings per share

5. Dividend yield
Dividend per share
----------------------------- x 100 = Yield
Market price of a share

6. Return of capital employed (ROCE)

Operating profit
Capital employed (net value + debt)

7. Return on net worth (RONW)

RONW is calculated as

Net Profit
Net Worth

8. PEG ratio

Expected growth rate of the EPS of the company
In general, a PEG lesser than 0.5 is a lucrative investment opportunity. However if the PEG exceeds 1.5, it is time to sell.

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