- P/E (price to earnings): market cap ÷ net profit of the last 12 months. It shows how many years of current profit the price pays for. Compare it with the company's peers and its own history.
- P/B (price to book): market cap ÷ shareholders' equity. Mostly used for banks and asset-heavy companies.
- ROE (return on equity): profit ÷ equity. Above 15% is generally considered good.
- ROCE: profit before interest and tax ÷ (equity + debt): returns on all the money used, including borrowed.
- Debt / equity: borrowings ÷ equity. Below 0.5 is usually comfortable outside banks and finance companies.
- Promoter holding: the founders' share. A falling holding or high pledging deserves a closer look.
Learn / Fundamentals
P/E, P/B, ROE and other key ratios
The most used valuation and quality ratios in plain English, with what counts as high or low.
Screen stocks by P/E and ROE ›
For education only, not investment advice.