indian stock market

June 16, 2007 11:33 IST T hough his salary may run into six digits, the average young executive would wait for that annual discount sale to buy his favourite brand of clothes, shoes and accessories. A well-heeled housewife would probably squeeze the last paise out of the corner vegetable vendor, before deciding to buy her daily quota. You will proba June 16, 2007 11:33 IST T hough his salary may run into six digits, the average young executive would wait for that annual discount sale to buy his favourite brand of clothes, shoes and accessories. A well-heeled housewife would probably squeeze the last paise out of the corner vegetable vendor, before deciding to buy her daily quota. You will probably haggle for those ten rupees with the porter before handing over your luggage , even if you are traveling first-class by Rajdhani. But when it comes to stocks, we prefer to buy the ones that are rising and shun those that are falling. A slight fall in value of stock reduces t

Introduction Chances are you've heard the term price/earnings ratio (P/E ratio) used before. When it comes to valuing stocks, the price/earnings ratio is one of the oldest and most frequently used metrics. Although a simple indicator to calculate, the P/E is actually quite difficult to interpret. It can be extremely informative in some situations, while at other times it is next to meaningless. As a result, investors often misuse this term and place more value in the P/E than is warranted. What Is It? P/E is short for the ratio of a company's share price to its per-share earnings. As the name implies, to calculate the P/E, you simply take the current stock price of a company and divide by its earnings per share (EPS). P/E Ratio = current market price of the stock Earnings per Share (EPS) The price/earnings ratio (P/E ratio) provides a comparison of the current market price of a share of stock and that stock's earnings per share, or EPS (which is figured by dividing a compan