Fundamental Ratio

Fundamental Ratios are quantitative metrics derived from a company's financial statements that are used to evaluate its financial health, profitability, valuation, and growth potential. Key fundamental ratios include the Price-to-Earnings (P/E) ratio, Price-to-Book (P/B) ratio, Debt-to-Equity (D/E) ratio, Return on Equity (ROE), and Earnings Per Share (EPS). Fundamental analysis—the backbone of long-term investing—relies heavily on these ratios to identify undervalued stocks with strong business quality and sustainable competitive advantages.