NISM Series XV : Research Analyst Certification Exam Notes
Page 51 Of 62
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Enterprise Value (EV) to Sales Ratio - When EV to EBIT or EV to EBITDA ratios start showing signs of expensiveness, then market participants, to justify cheapness of businesses, move to measures such as EV to Sales Ratio. It is used as a comparative metric when the firm makes no operating profits. If a business is making sales but losing money continuously even at the operating level, it may be a candidate for restructuring
ROE = Net Profits / Equity capital or Net-worth
ROCE = EBIT / Total Capital Employed (Debt + Net-worth)
Return on Invested Capital = Earnings / Invested Capital
Price to book value ratio = Market price per share/ Book value per share - Price to book value ratio = Market capitalization/ Book value of equity or net-worth
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