Market Prospect Ratios
Market Prospect ratios are used to compare publicly traded companies' stock prices with other financial measures like earnings and dividend rates. Investors use market prospect ratios to analyze stock price trends and help figure out a stock's current and future market value.
In other words, market prospect ratios show investors what they should expect to receive from their investment. They might receive future dividends, earnings, or just an appreciated stock value. These ratios are helpful for investors to predict how much stock prices will be in the future based on current earnings and dividend measurements. For instance, a downward trend in earnings per share and dividend yield point to profitability problems and could even raise going concern issues. All of these issues point to a lower stock evaluation.
Here are some of the basic market prospect ratios that investors tend to analyze.