FACE VALUE: 

  
Face value is also known as par value which is the legal capital of each share of stock held by an
individual. Face value is the original cost of the shares as listed on the certificate.
Face value is not calculated; rather it reflects the face value in the form of shares depending
upon the capital that a company wishes to raise from market. For example, when a company
goes public, it can have a face value of Rs 10. And it may trade at a market price of Rs 500.

WHY FACE VALUE IS IMPORTANT?

Face value has a key role in a company. It is generally used for the purpose calculating interest
on the shares and bonds. Also, for computing the market value, discounts, premiums and
returns, etc the value of a share is taken into consideration.

MARKET VALUE:
Market value is the value at which the share is traded on the listed stock exchange. It
represents the market capitalization of a publicly traded company.

Market value per share = total value of the company in the market (MARKET CAP) / total
number of shares issued by the company (NO. OF SHARES)

BOOK VALUE:
Book value, in literal terms, means the value of the share in the company’s books. It depicts the
amount per share the shareholders can get if the company is liquidated and its assets are sold
off to pay the liabilities.
Book value per share = total assets – total liabilities / total number of shares issued by the
company
Or
Book value per share = Equity share capital + reserves and surplus / total number of shares
issued by the company
WHY BOOK VALUE IS IMPORTANT?
When you divide the current price of the share of a company with its book value per share, you
get P/B (price to book value) ratio. P/B ratio is a highly useful comparison tool while taking an
investment decision based on various parameters.  Book value is primarily important for
investors using a investing strategy because it can enable them to find bargain deals on stocks,
especially if they suspect that the company is undervalued and/or is poised to grow, and the
stocks are going to rise in price.

CONCLUSION:
In a nutshell, Market value per share is the current value at which the stock is trading in the
market. Face value is the value of a company which is listed in its books and share certificate.
And finally, the book value of a company is the total value of the company’s assets that
shareholders will receive in case the company gets liquidated.

What Is Price-to-Earnings Ratio – P/E Ratio?

P/E ratio is the ratio for valuing a company that measures its current share price relative to its
per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price
multiple or the earnings multiple.
KEY TAKEAWAYS

 The price-earnings ratio (P/E ratio) relates a company's share price to its earnings per
share.
 A high P/E ratio could mean that a company's stock is over-valued, or else that investors
are expecting high growth rates in the future.
 Companies that have no earnings or that are losing money do not have a P/E ratio since
there is nothing to put in the denominator.
P/E Ratio= Market value per share/ Earnings per share(EPS)