WHAT IS A PRICE-TO-EARNINGS RATIO?

What is a P/E Ratio?

Wallstreet image

Value relativity

Price-to-Earnings (P/E) ratio is one of the many market-based valuation tools used to determine whether the stock is overvalued, undervalued or fairly valued. Various key metrics such as earnings, sales, book value or cash flow per share can be used. In this example, the earnings per share (EPS) metric will be used to demonstrate the P/E ratio application.

MoreWHAT IS A PRICE-TO-EARNINGS RATIO?

WHAT IS A DISCOUNTED CASH FLOW MODEL?

What is a Discounted Cash Flow Model?

 images (1)

http://www.axial.net/

A Discounted Cash Flow (DCF) model is a valuation method used to estimate what a business might be worth today, say N years from now. It determines the present value of future cash flows a firm could potentially generate from its underlying operating assets. An assumption of a base value (i.e. cash flow), growth rate and discount rate (opportunity cost) is required to estimate a firm’s value as shown in the formula below.

MoreWHAT IS A DISCOUNTED CASH FLOW MODEL?

HOW DIVERSIFIED ARE MARKET INDEXES?

For the regular investor with the “if you can’t beat them, join them” mind-set, the common adage would be to buy the index. But the crux of the matter boils down to the issue of – how many of us really know what exactly we are “joining”?

MoreHOW DIVERSIFIED ARE MARKET INDEXES?

HOW FAIR ARE FAIR VALUE GAINS?

What are fair value gains / losses?

Fair value can be defined as the amount of consideration agreed upon in an arm’s length transaction between knowledgeable, willing parties who are under no compulsion to act. Fair value is a market-based measurement and is generally used for assets whose carrying value is based on mark-to-market valuations and not for assets carried at historical costs.

MoreHOW FAIR ARE FAIR VALUE GAINS?

Random Macro Analysis For 2014

earth_1806334c

Messy messy messy

Messy is the word to discuss the world currently. The Arab Spring seems to be just a dream, with many countries turning over to extremism after the coup. Europe seems to be recovering but there still no clear idea on how the Euro should reform. Just when things are getting better, the Ukraine Crisis broke out. It seems we might be heading for another civil war.

Abenomics not working?

MoreRandom Macro Analysis For 2014

What Does Value Invest Asia Cover?

This article was first published on May 7, 2014

stock-market-3

 

We hope you have been enjoying our articles. What we hope to achieve in Value Invest Asia is to promote the concept of value investing to the Asian community. We see Asia as a fast growing investment region. Our stock markets are still at its infancy stages compared to the developed nations. It is the perfect time to help others to understand the most proven method of investing and how to assist the general public in taken charge of their financial freedom.

Markets we are active in

MoreWhat Does Value Invest Asia Cover?