Fundamental Library

Accumulated Depreciation
Adjustments (Cash Flow from Operating Activities)
Advance from Customers
Asset Turnover
Bonus Issue
Book Value / Equity Capital
Buyback
CAGR (Compound Annual Growth Rate)
Capital Work in Progress (CWIP)
Cash and Cash Equivalents
Cash Conversion Days
Cash Flow Per Share (CF/Share)
Cash From Financing
Cash From Investing
Cash From Operations
Chairman
Changes in Working Capital
Common Sized
Consolidated Financial Statements
Current Assets
Current Investments
Current Liabilities
Current Ratio
D/A
D/E
Debt
Depreciation
DII
Discount Rate
Discounted Cash Flow (DCF)
Dividend Yield
Dividend/Share
Dividends
EBIT
EBITDA
EBT
Effective Tax Rate
Employee Cost
EPS
EV/EBITDA
Exceptional Items (Income Statement)
Executive Director
Face Value
Fair Value
FCF Per Share
FII (Foreign Institutional Investor)
Financial Leverage Multiplier in Du Pont Analysis
Free Cash Flow Yield
Government Holding
Gross Block
Implied Growth Rate
Independent Directors
Institutional Holdings
Interest Coverage Ratio
Interest Expense
Inventories
Inventory Days
Long Term Loans & Advances
Long Term Provisions
Manufacturing Expenses
Market Cap
Net Block
Net Cash Flow
Net Profit
Non-Current Assets
Non-Current Investments
Non-Current Liabilities
Non-Executive Director
Non-Independent Directors
NPM (Net Profit Margin)
OPM (Operating Profit Margin)
Other Current Assets
Other Current Liabilities
Other Expense
Other Income
Other Non-Current Assets
P/B
P/E
P/S
Payable Days
PEG
Power Fuel Cost
Promoter Pledge
Promoters
PV (Present Value)
Quarterly Results
Raw Material Cost
Receivable Days
Reserves
Retail/Public Shareholding
Rights Issue
ROA (Return on Assets)
ROCE
ROE
Sales
Secured Loans
Selling and Distribution Costs
SGA costs
Share Capital
Shareholding Pattern
Short Term Borrowings
Short term loan and advances
Short Term Provisions
Standalone Financial Statements
Stock Splits
Tax
Tax %
Total Expense
Trade Payables
Trade Receivables
Unsecured Loans

P/E

Explanation: The Price-to-Earnings (P/E) ratio compares a company’s current market price per share to its earnings per share (EPS), providing insight into how much investors are willing to pay for each unit of earnings. A lower P/E ratio may suggest undervaluation, while a higher ratio may indicate overvaluation.

How it helps in investment decision making:

Valuation Assessment: Investors use the P/E ratio to assess whether a stock is priced fairly relative to its earnings potential. A lower P/E ratio may indicate that the stock is undervalued, potentially presenting a buying opportunity, while a higher P/E ratio may suggest overvaluation.

Comparison with Peers: Investors compare a company’s P/E ratio with those of its industry peers to gauge its relative valuation. A lower P/E ratio compared to competitors may suggest that the company is undervalued within its industry, making it an attractive investment opportunity.

Historical Analysis: Monitoring changes in a company’s P/E ratio over time allows investors to track trends in valuation. Significant deviations from historical P/E ratios may signal shifts in investor sentiment or changes in the company’s financial health.

Example: TCS has a P/E ratio of 33.80 as of FY23. This indicates that investors are willing to pay approximately 33.80 times the company’s earnings per share. Analyzing this ratio helps investors evaluate TCS’s valuation relative to its earnings performance and make informed investment decisions.

You can view P/E Ratio for any company over time on Radar under Valuation Ratios in the Ratios section.

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