Stock Market / Forex Gossip

According to many stock market expert, following tools are used to analyse a share or company fundamentally. This is not specific to any country or market, thi can be used globally in any market. CSE Gossips brings you this valuable information to you to pick a right share P/E Ratio The price earnings ratio (P/E) is the price of a share divided by its earnings per share (EPS). It is usually described as how many years of earnings are required to pay back the cost of buying a share, assuming no growth. Another way of looking at the P/E ratio is that it is the reciprocal of earnings yield, which is EPS divided by the share price. If a company has a P/E of 8, its earnings yield is 12.5% (100/8). If it pays out 40% of its earnings each year in dividends, then its dividend yield will be 5.0% (40% x 12.5). The P/E ratio is a ubiquitous measure of the rating of a share, and the simplest way of comparing two companies. But it is vital to ensure that you are comparing like with like