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How to value a company using a PE ratio // Motley Fool Australia – Motley Fool Australia

A key element of value investing is understanding how that value is calculated. Here is one key ratio that can help you make a decision.

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Are you a value investor?
Maybe you wouldn’t call yourself that specifically, but most investors are looking for a good deal.
A key element of investing is understanding value. Determining whether the current share price represents an over or undervalued proposition can really help with decision making. Furthermore, understanding value can help remove some emotion (I said some, we love what we love!)
How do you determine this value?
Analysts use financial ratios to determine value compared t…

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