Essential ratios for fundamental analysis

For the fundamental analysis, some essential ratios are Price to Earnings ratio, Price to Book Value ratio, Debt to Equity ratio, Free Cash Flow, Price/Earnings to Growth ratio, Asset Turnover ratio and Interest Coverage Ratio.
Good thing about financial ratios that they are easily available on various financial websites. We don't have to mug these formulas by heart.
Listing below some financial ratios that every stock investor should know.

  1. Earnings Per Share (EPS)
  2. Price to Earnings (PE) Ratio
  3. Price to Book (PBV) Ratio
  4. Debt to Equity (DE) Ratio
  5. Return on Equity (ROE)
  6. Price to Sales Ratio (P/S)
  7. Dividend Yield
I read somewhere that low P/E ratio is also helpful for investments in the stock market , can you please guide on this how this helps us as I am thinking to hold positions for long on some of the stocks?

Hulu Girl

Active Member
Ratio analysis is crucial for investment decisions. We bring you eleven financial ratios that one should look at before investing in a stock . P/E RATIO. The price-to-earnings, or P/E, ratio shows how much stock investors are paying for each rupee of earnings.

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