A company’s actual, fair worth

subjective, include an assessment of the company’s product mix, the level of competition, management, strategy, and the strength of its brand

a thorough examination of a company’s financial statements, using comparisons and ratios to determine financial health

Stocks are too expensive given fundamentals

Stocks are undervalued or “on sale”

how much profit goes to each share of common stock

how much of sales the company retains as profit

what percentage of sales is left after subtracting the direct cost of producing the goods

the so-called “bottom line,” considers all aspects of running the business, summing up in one number how well the managers extract a profit from each dollar of sales.

measures management’s skill in turning your investment into profit

the most popular measure of the value of a stock. Tells what investors are willing to pay for every dollar of earnings. Higher number = Higher expectations (based on industry average.

Ratio that’s adds “Growth” to PE. In general, the lower the PEG the better; investors would be paying less for each unit of earnings growth.

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