Mvanle,Thanks for the references of ratios, etc.If you go to the...

Mvanle,

Thanks for the references of ratios, etc.

If you go to the "research" section of ComSec's (or other broker's) website, you'll find the most important ratios and other "key measures" are already calculated there for you. Note that those numbers are all calculated from past data, they are not all accurate, and they are not necessarily indicative for the future.

The true stock value is determined by its anticipated future performance rather than the past. So the predicted future e/s is more relevant in estimating the present value. Theoretically this true value (or fair price) can be estimated by "discounted cash flow".

http://en.wikipedia.org/wiki/Discounted_cash_flow
http://www.fool.com/dripport/2000/dripport000619.htm

And the p/e ratio approach I used is just a simplified version of the discounted cash flow.

I hope the above will help.