what can you determine the good condition of a company? by the price per share; or by its value in stock exchange?



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how can you recognise if a company is profitable as Investor, among Google, Yahoo, Facebook, Microsoft, Apple? you must focus on price per share or value of the company on stock exchange or other items?

1 Answer(s)


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Price per share is a meaningless number. The number to focus on is the P/E ratio. This gives you an idea of the value of the share relative to its earnings.

But just P/E ratio does not reflect that a company is good. Other metrics need to analyzed such as revenue growth rate, free cash flow, net margins etc