market value ratios

Definition

An equation that compares the current stock price to a financial indicator on the company's financial statements. The most often used indicator is a company's earnings per share. For example, if a stock price is $10 and its earnings are $2 per share, then the market value ratio would be 5-to-1. Market value ratios are typically used to determine if a company is over or undervalued.

Use market value ratios in a sentence

You should try to break down the market value ratios and see if there is a better way for you to proceed.

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The market value ratios had to be paid attention to and I was really surprised with how easy it was to figure out.

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When Sven was looking closely at the market value ratios, he realized that the company earnings were holding steady and he hoped to increase the margin.

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market value clause price/earnings ratio