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PROFITABILITY RATIO MM
PROFITABILITY RATIO MM
PROFITABILITY RATIO MM
Price Earnings Ratio establishes the relationship between the market price of an equity share and
the earning per equity share. The ratio helps to find out whether the equity shares of a company
are undervalued or not. This ratio is also useful in financial forecasting. This ratio is calculated as
:
Net Profit to Net worth Ratio: This ratio measures the profit return on investment. This ratio
indicates the established relationship between net profit and shareholders net worth. It is a
reward for the assumption of ownership risk. This ratio is calculated as:
(or)