Valuation, or market value, ratios are used to determine the value of a stock or security when compared to a certain measure like profits or enterprise value. In this section, we cover the most important valuation ratios you need to know.

## What are valuation ratios?

Valuation ratios, sometimes called market value ratios, are measurements of how appropriately shares in a company are valued and what type of return an investor may get. By calculating the market value a potential investor can see if the shares are overvalued, undervalued, or at a fair price. It also helps determine how much a potential investor should buy.

There are several different valuation ratio calculations that can be done to find the market value of a company or stock. Understanding how each ratio works can give you a better evaluation of a company’s financial health.

## List of valuation ratios

Below is the complete list of valuation ratios we have covered. Each will provide a detailed overview of the ratio, what it’s used for, and why.

They also explain the formula behind the ratio and provide examples and analysis to help you understand them.

- Dividend Yield
- Capital Asset Pricing Model
- Internal Rate of Return
- Price to Earnings Ratio
- Weighted Average Cost of Capital (WACC)
- Price to Sales Ratio
- Rule of 72
- Free Cash Flow to Equity (FCFE)
- Annual Percentage Yield
- Doubling Time (Rule of 70)
- Dividend Per Share
- Dividend Payout Ratio
- Book Value Per Share
- Price To Book Ratio
- Holding Period Return (HPR)
- Retention Ratio (Plowback Ratio)
- Sortino Ratio
- Sharpe Ratio
- Residual Income (RI)
- Treynor Ratio
- Price to Cash Flow Ratio
- Net Fixed Assets
- Enterprise Value (EV)
- Accumulated Depreciation to Fixed Assets Ratio
- Free Cash Flow to Firm (FCFF)
- Free Cash Flow (FCF)
- PEG Ratio
- Correlation Coefficient
- Free Cash Flow to Sales Ratio
- Cash Reinvestment Ratio
- Price Earnings to Growth and Dividend Yield (PEGY)