What are the key financial ratios to analyze stock market information?



Q7. List of stock market related ratios
What are the key financial ratios that use information from the stock market?

A7.
Stock market related ratios are calculated as follows:
(1) Price earnings (P/E) ratio
= Market price of common stock per share / Earnings per share
(2) Price to book ratio
= Market to book ratio
= Market price of common stock per share / Book value of common stock per share
(3) Dividend payout ratio
= Cash dividends declared on common stock / Net income
(4) Dividend yield
= Annual dividends per share of common stock / Market price of common stock per share

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