Valuation ratios relate a market price to an accounting or forecast input. They describe a comparison; they do not establish whether a security is suitable or whether its price will rise.
Price to earnings
P/E = market price per share / earnings per share. Trailing P/E uses reported earnings, while forward P/E depends on estimates. Compare the period, accounting basis, cyclicality and unusual items before interpreting either figure.
Price to book
P/B = market price per share / book value per share. Book value can be more central to some balance-sheet-driven businesses than to asset-light businesses. Accounting classification, asset quality and return on equity still matter; no P/B level is a universal fair-value threshold.
Price to sales
P/S = market capitalization / revenue. It can be computed when earnings are negative, but it does not capture margins, cash conversion, capital needs or dilution.
PEG
PEG = P/E / selected earnings-growth rate. The result is highly sensitive to the growth estimate and its period. A value below or above one is not, by itself, proof of under- or overvaluation.
Dividend discount model
A constant-growth DDM uses value = next dividend / (required return - growth). It requires the selected return to exceed the growth assumption and is very sensitive to both inputs. The output is an assumption-driven scenario, not an intrinsic-value fact or recommendation.
Using metrics responsibly
Use consistent periods and definitions, read the financial statements and notes, and test how estimates affect the result. Industry economics, balance-sheet risk, cash flow, governance and dilution can change what a ratio means. No fixed P/E, P/B, PEG, growth or required-return cutoff works for every company.