Value Investing is nothing fanciful. The problem is that there are too many financial ratios to confuse the investors. The key is to look at the right ones. Study enough to make an informed decision to buy and sell. There is no point listening to too many opinions or over-analyse a company and end up taking no action because the signals are contradicting one another. To help you, I have list down 8 key financial ratios that you, as a value investor, must know.

#1  - Price-Earnings

PE ratio is the most common financial ratio to investors. The numerator is the price of the stocks while the denominator is the earnings of the company. This means that how many times of earnings are you paying for the stocks. For example, if the PE is 10, it means that you are paying 10 years worth of earnings. The lower the PE, ...