If you are going to invest in the stock market, then read this news first, it will be in profit

Share Market: The trend of investing in the stock market is increasing day by day. After the Corona epidemic, especially people’s interest in investing in the stock market has increased. The stock market has not disappointed investors since the pandemic. There was a big fall in the stock market in March last year. Then the Sensex fell to the level of 26000 points. On Thursday (September 16), the BSE Sensex set a new record. Sensex has crossed the 59,000 mark. On the other hand, Nifty was also seen close to 17,600 points on Thursday.

If you want to invest in the stock market, then you need to have some basic information. This information will be of great use to you. We are going to tell you about some such ratios, with the help of which you will be able to evaluate the stock easily.

Price to Earnings Ratio (P/E)
First of all, let’s talk about the PE ratio. It is used to find out the value of the shares of a company. PE is the ratio of share price to share earnings. It means earnings per share. It is helpful in the selection between two companies in the same sector. Explain that income from shares is also called EPS.

P/E = (price per share/earnings per share)

PEG Ratio
The PEG ratio is used to find the value of the share keeping in mind the increase in the earnings of the company. The PE ignores the company’s growth rate, but it is not the case with the PEG ratio. This is the reason why it is considered better than PE.

PEG Ratio = (Estimated Annual Growth in PE Ratio / Earnings)

Price to Book Value Ratio
The price to book value ratio is also called the net asset value of the company. It is calculated as total assets minus intangible assets and liabilities. Companies that have a low price to book value ratio are considered undervalued.

Price to Book Value Ratio = (Market Value per Share / Book Value per Share)

Earnings Per Share (EPS)
EPS is the share of profit of the company allocated for each share. It serves as an indicator of the profitability of the company. Earnings per share is a financial ratio divided by net income in common. Shares of companies that increase earnings per share are considered better for investment.

EPS = (Net Income / Total Shares)

Return on Equity (ROE)
This Return on Equity (ROE) shows how well the company is able to reward its shareholders. This is the amount of net income paid to the shareholder as a percentage of equity. It is better to invest in stocks of companies whose average ROE for the last three years is more than the sum of the interest rate and inflation rate.

ROE = (Net Income / Shareholders’ Total Funds)

Disclaimer: (The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. Anyone from ABPLive.com Also investing money is never advised here.)

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