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Formula sheet/NISM Series XV: Research Analyst/Terminology in Equity and Debt Markets
[ TERMINOLOGY IN EQUITY AND DEBT MARKETS ]

Valuation Multiples: P/E, P/S, and P/BV

P/E Ratio=CMPEPSP/\text{E Ratio} = \dfrac{CMP}{EPS}
P/S Ratio=CMP/Net Sales per Share=Market CapAnnual Net SalesP/\text{S Ratio} = CMP / \text{Net Sales per Share} = \dfrac{\text{Market Cap}}{\text{Annual Net Sales}}
P/BV Ratio=CMPBVPSP/\text{BV Ratio} = \dfrac{CMP}{BVPS}
Variables

CMP: Current market price; EPS: Trailing 12-month (TTM) or Forward EPS.

Exam note

P/S and P/BV are essential when earnings are cyclical, temporarily depressed, or negative (losses).

Worked examples
Book Value Per Share (BVPS) Calculation

Apex Auto Ltd has an issued equity capital of Rs 50 Crore (Face Value Rs 10 per share), General Reserves of Rs 320 Crore, Retained Earnings of Rs 180 Crore, and Revaluation Reserves of Rs 50 Crore. If the company has accumulated deferred losses of Rs 20 Crore, compute the BVPS.

Standalone vs. Consolidated Enterprise Value (EV)

A parent entity has 2 Crore equity shares trading at Rs 450 per share. It has preferred capital of Rs 50 Cr, standalone debt of Rs 200 Cr, and standalone cash of Rs 60 Cr. Its subsidiary has minority interest of Rs 80 Cr, debt of Rs 120 Cr, and cash/liquid investments of Rs 40 Cr. Compute Standalone and Consolidated EV.

EPS, DPS, and Dividend Payout Ratio

Zenith Pharma reports Net Profit after Tax of Rs 180 Crore for FY2026. The company has 12 Crore equity shares outstanding with a Face Value of Rs 2 each. The Board declares a dividend of 250%. Calculate Basic EPS, DPS, and the Dividend Payout Ratio.

Bond Current Yield and Holding Period Return (HPR)

An 8.50% coupon G-Sec (Face Value Rs 100) is purchased in the secondary market at Rs 102.00. The investor holds it for 1 year, collects the annual coupon of Rs 8.50, reinvests the coupon at 6.00% p.a. for 1 year, and sells the bond at Rs 106.00. Calculate the Current Yield and the 1-year HPR.