Equity Valuation

Valuing a Stock With Three Tools: Where NAV, Forward P/E and P/S Each Break Down

We open up the three main equity valuation tools: net asset value, the forward price to earnings ratio, and the price to sales ratio. You will see what kind of company each one was built for, how each is calculated, and above all exactly where each breaks down, with a hypothetical example in which one company gets three different answers from three tools.