Formulas by Sector – Consumer Discretionary – (Low)

Question: What ratio formulas are used to evaluate publicly traded companies in the Consumer Discretionary sector for investing in the companies stock?

To evaluate publicly traded companies in the Consumer Discretionary sector for investing in their stock, some of the key ratio formulas used are:

Price-to-Earnings (P/E) Ratio

P/E Ratio = Stock Price per Share / Earnings per Share (EPS) The P/E ratio compares a company’s stock price to its earnings and is widely used to value consumer discretionary companies. A higher P/E may indicate investors expect higher future earnings growth.

Price-to-Sales (P/S) Ratio

P/S Ratio = Market Capitalization / Total Revenue The P/S ratio compares a company’s stock price to its revenue or sales. It is commonly used for evaluating consumer discretionary companies that may not be profitable yet, as revenue growth indicates potential market share gains.

Debt-to-Equity (D/E) Ratio

D/E Ratio = Total Liabilities / Shareholders’ Equity The D/E ratio evaluates a company’s financial leverage by comparing its total debt to shareholders’ equity. Lower ratios are preferred for consumer discretionary firms as they operate in cyclical industries.

Inventory Turnover Ratio

Inventory Turnover = Cost of Goods Sold / Average Inventory This ratio measures how efficiently a consumer discretionary company manages and sells its inventory. Higher turnover ratios indicate better inventory management.

Operating Margin

Operating Margin = Operating Profit / Revenue Operating margin shows the profitability from core operations for a consumer discretionary company after deducting operating expenses like marketing and distribution costs. Analyzing these ratios in combination, compared to industry peers and historical trends, helps investors assess the valuation, growth potential, financial leverage, operational efficiency, and profitability of consumer discretionary stocks. The cyclical nature of this sector makes these metrics particularly important.

Question: Write html code for formulas an calculate price to earnings ratio, price to sales ratio, debt to equity ratio, inventory turnover, operating margin.

Ratio Formulas and Calculations

Price-to-Earnings (P/E) Ratio

P/E Ratio = Stock Price per Share / Earnings per Share (EPS)

Enter Stock Price per Share:

Enter Earnings per Share (EPS):

Price-to-Sales (P/S) Ratio

P/S Ratio = Market Capitalization / Total Revenue

Enter Market Capitalization:

Enter Total Revenue:

Debt-to-Equity (D/E) Ratio

D/E Ratio = Total Liabilities / Shareholders’ Equity

Enter Total Liabilities:

Enter Shareholders’ Equity:

Inventory Turnover

Inventory Turnover = Cost of Goods Sold / Average Inventory

Enter Cost of Goods Sold:

Enter Average Inventory:

Operating Margin

Operating Margin = Operating Profit / Revenue

Enter Operating Profit:

Enter Revenue: