Valuation Ratios
Valuation Ratios are financial metrics used by investors to evaluate the attractiveness of a company's stock price in relation to its financial performance. These ratios typically compare the market value of a company's stock to certain financial measures, such as earnings, cash flow, or book value. Common valuation ratios include price-to-earnings ratio (P/E), price-to-book ratio (P/B), price-to-sales ratio (P/S), and price-to-cash flow ratio (P/CF). Investors use these ratios to assess whether a stock is overvalued, undervalued, or fairly valued, helping them make informed investment decisions.