Question 1

What is the PEG Ratio?

Accepted Answer

The PEG ratio divides the PE ratio by earnings growth, helping identify if a stock is overvalued or undervalued relative to its growth prospects.

Question 2

Why is Price-to-Cashflow important?

Accepted Answer

Operating cash flow is harder to manipulate than net profit, making this metric a reliable check on a company's financial health.

Question 3

What does a low Inventory to Sales ratio mean?

Accepted Answer

It generally indicates efficient inventory management, suggesting the company is converting its stock into sales quickly.