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What are market value ratios and how are they used?

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Question: What are market value ratios and how are they used?
Answer:

Market value ratios evaluate the economic status of your company in the wider marketplace. Market value ratios include the earnings per share, price earnings ratio, the price/cash ratio, dividend yield, book value per share, market value per share, and the market/book ratio. Market value ratios give management an idea of what the firm's investors think of the firm's performance and future prospects.

Market value ratios are pertinent to the publicly traded firm. If the rest of the company's ratios are good, then the market value ratios should reflect that and the stock price of the firm should be high. Market value ratios measure different ways of looking at the relative value of a company's stock.

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