Valuation

Topics: Fundamental analysis, P/E ratio, Time value of money Pages: 1 (265 words) Published: January 5, 2013
Valuation :
* Price earnings ratio :
DESCRIPTION| Mar-12| Mar-11| Mar-10| Mar-09| Mar-08|
Price-earnings ratio| 23.04| 24.23| 12.71| 7.25| 12.17|
This ratio reflects the following factors : growth prospects, risk characteristics ,shareholder orientation ,corporate image and the degree of liquidity.It indicates company performance and forecast future performance.Ratio is decreasing and it is good sign because investors will get high earnings.But risk will be also high because of more uncertainity.So If high P/E ratio than risk will be less.It is high for last two years so investors will have less risk and good return in future.

* Yield :
DESCRIPTION| Mar-12| Mar-11| Mar-10| Mar-09| Mar-08|
Yield(%)| 1.37| 1.25| 0.85| 1.63| 1.41|

It attracts investors if it is high. It shows the rate of return actually earned by equity shareholders. Investors who require a minimum stream of cash flow from their investment portfolio to secure cash flow use stable yield stocks.It is marginally increased so good for such investors.

* Market value to book value ratio :

DESCRIPTION| Mar-12| Mar-11| Mar-10| Mar-09| Mar-08|
P/B ratio| 4.45| 5.51| 5.92| 2.93| 5.47|

It shows the contribution of a firm to the wealth of the society.Lower ratio is bad indicator.Here ratio is 4.45 in this year.It shows valuation of stock.Lower value of P/B ratio could mean that it is undervalued.Since 2010 ,It is improving.So it is good sign for investors.
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