What is Pe Ratio
To earn money in the share market, many people are greedy, those people buy shares on the trust of others. But after that there is a small profit, later many people have a lot of loss.
Contrary to that, those people who analyze the stock market and analyze about the market and then invest in the stock market, those people make good profits. work.
What is Pe Ratio
In Pe Ratio, P stands for Price and E means Earnings. Before knowing about pe, it is very important to know where pe is needed more. To calculate the value of any share in the share market, Pe is needed. This shows which shares are getting cheap and which shares are expensive in terms of value right now.
With the help of P e, we can buy any share at the best price and sell the shares at a good profit. The lower the Pe, the cheaper the share price and the higher the Pe, the more expensive the share price.
How to find PE Ratio
Let us explain with an example – suppose the share price of any one company is Rs 100, in the last one year that share has earned Rs 20 on a share which earned Rs 20, it is called Earning Per Share (EPS).
To get Pe Ratio, if you divide 100 rupees by 20 (200/20=5), then 5 rupees will come out. Similarly, the Pe of that company will be 5. This means that to earn Re 1 you have to invest Rs 5 .
It does not mean that one who has low Pe has to buy it. Having low Pe means A may also mean that in future Nibesco thinks that A share will not be very successful. That’s why the shares of that company are getting more low than necessary.
The company which is not making profit in its business is running on loss, its Pe will be seen at minus. Usually the Pe of the company should be determined by mixing it with that of its competitor company.
Conclusion (What is Pe Ratio )
Do not buy any share on the basis of pay ratio, for this you should do proper analysis about the share you want to buy, profit of that share, business future. For all the information related to the share market, you can increase your knowledge by reading our other articles.