Question: What ratio formulas are used to evaluate publicly traded companies in the information technology sector for investing in the companies stock?
To evaluate publicly traded companies in the information technology sector for investing in their stock, some commonly used ratio formulas include:
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 useful for evaluating mature, profitable tech companies.
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 high-growth tech companies that may not be profitable yet.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
EV/EBITDA Ratio = Enterprise Value / EBITDA The EV/EBITDA ratio compares a company’s enterprise value to its earnings before interest, taxes, depreciation, and amortization. It is useful for comparing tech companies with different capital structures.
PEG Ratio
PEG Ratio = P/E Ratio / Earnings Growth Rate The PEG ratio accounts for a tech company’s growth prospects by dividing its P/E ratio by its earnings growth rate. Other ratios like the current ratio, cash ratio, debt-to-equity ratio, and gross profit margin are also used to evaluate liquidity, financial leverage, and profitability of tech companies. Analysts compare these ratios to industry peers and historical averages to assess relative valuation when considering investing in a tech company’s stock.
Question: Write html code for formulas an calculate price to earnings ratio, price to sales ratio, enterprise value to ebitda ratio, peg ratio
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:
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
EV/EBITDA Ratio = Enterprise Value / EBITDA
Enter Enterprise Value:
Enter EBITDA:
PEG Ratio
PEG Ratio = P/E Ratio / Earnings Growth Rate
Enter P/E Ratio:
Enter Earnings Growth Rate: