Key Financial Ratios Every Investor Must Know (PE, ROE, PB & More)
Key Financial Ratios Every Investor Must Know (PE, ROE, PB & More) When you start investing in the stock market, share prices alone can be very misleading. A stock trading at ₹2,000 may look expensive, while another at ₹200 may look cheap — but the reality is often the opposite. This is where financial ratios come in. Financial ratios help you understand whether a company is actually cheap or expensive, profitable or struggling, and financially strong or weak. In this detailed guide, we will cover the most important financial ratios that every serious investor in the Indian stock market should know. Why Financial Ratios Matter Imagine two companies: Company A is making good profits and growing steadily Company B is barely profitable and drowning in debt If you only look at the share price, you may end up buying the wrong one. Ratios give you a clear, numbers-based view of the business. Here are the most important ratios every investor must understand: 1. Price to Ear...