Valuation metrics answer one question: what are you paying for what you get? Each one divides price (or enterprise value) by some measure of what the business produces. None of them is a verdict on its own - a stock at 8x earnings can be expensive and one at 30x cheap - but together they tell you what the market already believes, which is the starting point of every value investment.

All figures in the ValueMap screener are trailing twelve months (TTM) unless noted.

PE Ratio

What it is: PE stands for price-to-earnings: the price of the whole company divided by its annual profit, or equivalently the share price divided by earnings per share. It tells you how many years of current earnings you are paying for the business. A PE of 15 means the company earns back its own price in fifteen years, if nothing changes.

Why value investors care: It is the fastest way to ask “am I overpaying?” Value investors traditionally hunt below 15, and below 10 is where genuine bargains (and genuine problems) live. In the US, anything under ~20 passes for fairly valued these days; other markets run cheaper - Japan and Europe often trade several turns lower for comparable businesses. Two traps: cyclicals look cheapest at the top of their cycle, right before the E collapses, and a negative PE simply means losses - filter it out rather than reading meaning into it.

PB Ratio

What it is: PB stands for price-to-book: the market price of the company divided by its book value - the accounting net worth left over when you subtract everything it owes from everything it owns. A PB of 1 means you are paying exactly what the balance sheet says the equity is worth.

Why value investors care: This was Benjamin Graham’s original yardstick: below 1 you are buying assets for less than their stated value, which gives you a margin of safety independent of any earnings forecast. Under 1 is classic deep-value territory, 1-3 is normal for mature businesses, and above that the balance sheet stops being your protection. The framework only works where book value means something - banks, insurers, industrials. For software and services companies, whose real assets (people, code, brands) never hit the balance sheet, a PB of 10 is normal and tells you almost nothing.

PS Ratio

What it is: PS stands for price-to-sales: the company’s price divided by its annual revenue. It is the bluntest of the valuation ratios - it ignores costs, margins, debt, everything except the top line.

Why value investors care: Revenue is the hardest line of the income statement to fake, which makes PS the ratio of last resort when earnings are depressed, negative, or suspicious. A profitable business under 1x sales deserves a look; under 0.5x with any margin at all is genuinely cheap. But calibrate by industry: a supermarket at 0.3x sales and a software firm at 8x can be equally fairly priced, because their margins differ tenfold. Ken Fisher, who popularized the ratio, used under 0.75 for industrials. Always read PS next to net margin - it is half a metric on its own.

P/FCF

What it is: Price to free cash flow: the company’s price divided by the cash it generated after paying for operations and capital expenditures - the money that could actually be handed to owners without shrinking the business. Think of it as the PE ratio’s more honest sibling.

Why value investors care: Earnings are an accounting opinion; cash is a fact. A company can report profits for years while burning cash, but not the reverse. Value investors read under 15 as interesting and under 10 on a stable business as the good stuff - roughly the same scale as PE, and when the two disagree sharply, believe the cash flow. The caveat: FCF is lumpy. One year of light capex or a favorable working-capital swing can flatter it, so check that the number is representative before acting on it.

EV/EBITDA

What it is: Enterprise value to EBITDA - earnings before interest, taxes, depreciation, and amortization. EV is what an acquirer would actually pay: the equity plus the debt they assume. So this ratio prices the whole enterprise against its raw operating profit, before financing and accounting choices muddy the picture.

Why value investors care: Because it includes debt, it exposes the leveraged company that a low PE hides - a stock at 8x earnings but 6x levered can be dearer than one at 15x with net cash. Private-equity buyers think in these terms: under 8 is traditionally cheap, 8-12 is fair for a decent business, and above 12 you are paying for growth. Munger’s warning stands, though: EBITDA pretends depreciation isn’t a cost, and for capital-hungry businesses it very much is. Pair it with capex intensity before trusting it.

PEG Ratio

What it is: PEG stands for price/earnings-to-growth: the PE ratio divided by the earnings growth rate (as a whole number - a PE of 20 growing at 20% gives a PEG of 1). It asks whether the growth justifies the multiple.

Why value investors care: Peter Lynch’s rule of thumb: a fairly priced growth stock has a PEG around 1. Below 1 you are paying less than a point of multiple per point of growth - attractive; above 2 you are paying for hope. It is the bridge between value and growth investing, and useful for comparing two similar businesses at different multiples. Its weakness is the denominator: growth estimates are where analysts are most reliably wrong, so treat PEG as a tiebreaker, never a primary screen.

Earnings Yield

What it is: The PE ratio flipped upside down and expressed as a percentage: annual earnings divided by price. A PE of 20 is an earnings yield of 5%; a PE of 10 yields 10%. Same information, different frame.

Why value investors care: The percentage form makes stocks directly comparable to bonds - which is how Graham himself framed the decision. An 8% earnings yield against a 4% treasury offers a 4-point equity risk premium; a 4% yield against the same treasury offers nothing for the extra risk. Greenblatt’s Magic Formula uses a variant of this as its cheapness leg. As a working framework: above 8% is value territory, 5-8% is ordinary, below the 10-year treasury yield means you are betting purely on growth.

FCF Yield

What it is: Free cash flow divided by price, as a percentage - the cash-based twin of earnings yield. If the company paid out every spare dollar it generated, this is the return you would collect at today’s price.

Why value investors care: It is the purest owner’s-return number on the screen. Above 5% from a stable business is respectable, above 8% is either a bargain or the market’s warning that those cash flows are about to shrink - your job is deciding which. Compare it to the company’s own dividend yield: a 9% FCF yield paying out 2% means enormous room for buybacks, debt paydown, or dividend growth. Watch for cyclical peaks and one-off working-capital boosts dressed up as sustainable yield.

Enterprise Value

What it is: Enterprise value is the price tag an acquirer would actually face: the market value of the equity, plus the debt they would assume, minus the cash they would pocket at closing. It is the “whole business” price, where market cap is only the equity slice.

Why value investors care: EV is the correct numerator whenever you compare companies with different balance sheets - two firms with identical market caps are not equally priced if one carries triple its equity in debt. The special case worth screening for: EV below market cap means net cash, and occasionally EV approaches zero or goes negative - the market is handing you the operating business for roughly the cash in the till. Those situations are rare and usually come with a story, but they are where value investors go looking first.

Enterprise Value Multiple

What it is: The data provider’s name for the standard EV/EBITDA computation - enterprise value over EBITDA. In this screener it tracks the EV/EBITDA field almost exactly.

Why value investors care: For the same reasons as EV/EBITDA above - it prices the whole capital structure against operating profit. It exists as a separate field in the data source and is kept for completeness; use whichever of the two you prefer and ignore the other. If they ever diverge meaningfully for a stock, that is a data artifact, not a signal.

EV/FCF

What it is: Enterprise value to free cash flow: the whole-business price (equity plus net debt) divided by the cash left after operations and capex. The strictest of the mainstream valuation ratios - honest numerator, honest denominator.

Why value investors care: This is the ratio that keeps you honest about leverage. A stock can look cheap at 9x P/FCF while sitting at 20x EV/FCF because debt makes up the difference - and the debt holders get paid before you do. Under ~15 is attractive for a stable business; under 10 is rare outside distress. When P/FCF and EV/FCF disagree strongly, the balance sheet is the reason, and the EV version is telling the truer story.

EV/Sales

What it is: Enterprise value to sales: the whole-business price divided by annual revenue. The PS ratio with the debt counted.

Why value investors care: It is the go-to multiple for unprofitable or turnaround situations, where every earnings-based measure fails but the revenue base is real. Under 1x for a business with a path to normal margins is the classic setup - you are paying less than one year of sales for the whole enterprise. As with PS, industry context is everything: low-margin sectors live below 1x permanently without being cheap, and a 40%-margin software firm at 3x sales may be the better bargain. Read it with the margin structure or not at all.

EV/OCF

What it is: Enterprise value to operating cash flow: the whole-business price divided by cash from operations, before subtracting capital expenditures. It sits between EV/EBITDA (more forgiving) and EV/FCF (less forgiving).

Why value investors care: For capital-intensive businesses in an investment phase - building plants, rolling out stores - FCF is temporarily crushed while operations genuinely gush cash. EV/OCF shows you that engine without the capex noise. Under ~10 suggests the operations are cheap; the follow-up question is always whether the capex being spent is growth (fine) or maintenance the company can never escape (not fine). Compare with Capex To Operating Cash Flow to tell the difference.

Forward PEG

What it is: The PEG ratio computed with projected rather than trailing growth: today’s PE divided by the growth rate analysts expect. The same fair-value-around-1 interpretation applies.

Why value investors care: Mostly as a sanity check on story stocks - if a company needs 40% forecast growth to reach a PEG of 1, you know exactly how much optimism is priced in. Everything wrong with PEG applies here with more force: you are dividing by a guess about the future, sourced from the same analysts who missed the last downturn. Below 1 is nominally attractive, but a value investor treats a cheap forward PEG as a question to investigate, never a reason to buy by itself.

P/OCF

What it is: Price to operating cash flow: the company’s price divided by cash generated from operations, before capital expenditures. Because capex is excluded, it is steadier year to year than P/FCF.

Why value investors care: Its stability makes it better for comparing a company across time and against peers - single-digit P/OCF for an established business is historically cheap, 10-15 is ordinary, and above 20 you are paying up. The trade-off is that it flatters capital-hungry businesses that must spend that cash flow just to stand still: an airline and a software firm at the same P/OCF are not remotely the same bargain. Always read it alongside Capex To Operating Cash Flow to see how much of the cash actually survives.

PE Diluted

What it is: The PE ratio computed with diluted earnings per share - the share count as it would be if every outstanding option, warrant, and convertible were exercised. It answers: what am I paying per share of earnings after everyone with a claim shows up?

Why value investors care: For most mature companies it barely differs from plain PE, and that is the point - the gap between the two is a direct reading of the dilution machine. A widening spread means heavy stock-based compensation quietly transferring your ownership to employees, year after year. Value investors treat a persistent gap of more than a turn or two as a red flag on management’s alignment, and it pairs naturally with the SBC / Revenue metric in the Quality group.