Corporate Value: A Simple Guide to Fundamental Analysis

Metric	Overview	What is Evaluated	When Used	Evaluation Method
Price Earnings Ratio (PER)	Ratio of stock price to earnings per share (EPS)	Fair value of stock price	To judge whether the stock price is high or low relative to earnings.	Generally, lower PER indicates undervaluation. Appropriate values vary by industry, but 10-20 is a general range.
Price Book-value Ratio (PBR)	Ratio of stock price to book value per share (BPS)	Fair value of stock price	To judge whether the stock price is high or low relative to the company’s net assets.	PBR less than 1 is undervalued. Even if it is 1 or more, companies with high growth potential are acceptable even if high.
Return On Equity (ROE)	Ratio of net income to equity	Efficiency and profitability of shareholders’ equity	To evaluate the profitability relative to the company’s shareholders’ equity.	Generally, higher ROE indicates higher efficiency. 15% or more is desirable.
Return On Assets (ROA)	Ratio of net income to total assets	Efficiency and profitability of total assets	To evaluate the profitability relative to the company’s total assets.	Generally, higher ROA indicates higher efficiency. 5% or more is desirable.
Profit Margin	Ratio of profit to sales	Profitability of the company	To evaluate the company’s profitability from multiple angles.	Depends on industry and company scale, but higher indicates higher profitability.
Current Ratio	Ratio of how much current assets can cover current liabilities	Short-term solvency	To evaluate the company’s short-term solvency.	Generally, 100% or more is desirable. 200% or more is healthy.
Fixed Ratio	Ratio of how much fixed assets are covered by equity	Long-term financial health	To evaluate the company’s long-term financial health.	Generally, 100% or less is desirable.
Debt Ratio	Ratio of debt to equity	Financial risk	To evaluate the company’s financial risk.	Generally, 100% or less is desirable.
Earnings Per Share (EPS)	Net income per share	Profitability for shareholders	To evaluate profitability for shareholders.	Higher indicates higher profitability. Growth compared to past EPS is also important.
Book-value Per Share (BPS)	Net assets per share	Fair value of stock price	To evaluate whether the stock price is appropriate relative to the company’s net assets.	Higher indicates higher asset value. Evaluated in conjunction with PBR.
Dividend Yield	Ratio of dividend to stock price	Return on investment	To evaluate the return on shareholders’ investment.	Generally, 2-4% is an appropriate range. Higher indicates larger return.

Indicator Name	Overview	What is Evaluated	When Used	Evaluation Method
Management Quality	Evaluate experience, ability, and reliability of management	Management quality and company future	To judge the quality of management.	Evaluation of management’s past achievements, leadership, corporate culture, etc.
Market Environment	Evaluate industry growth, competition, regulatory environment, etc.	Industry attractiveness and company competitiveness	To judge industry attractiveness and competitiveness.	Analysis of industry growth rate, competition situation, regulatory environment.
Brand Value	Evaluate company’s brand power and market recognition	Brand power and competitive advantage	To judge the company’s competitive advantage.	Evaluation of brand recognition, reliability, customer satisfaction.
Innovation Capability	Evaluate company’s technological innovation ability and R&D activities	Technological innovation power and future growth potential	To judge technological innovation power.	Evaluation of R&D expenses, number of patents, track record of new product introduction, etc.
Sustainability	Evaluate company’s ESG (Environmental, Social, Governance) initiatives	ESG initiatives and company sustainability	To judge company sustainability.	Evaluation of environmental measures, social contribution activities, quality of governance.
Customer Satisfaction	Evaluate customer satisfaction and repeat rate	Customer satisfaction and customer loyalty	To judge company’s customer satisfaction.	Evaluation of customer surveys, repeat rates, word of mouth.
Employee Satisfaction	Evaluate employee satisfaction and retention rate	Employee satisfaction and company internal environment	To judge company’s internal environment.	Evaluation of employee surveys, turnover rates, welfare benefits.
Corporate Culture	Evaluate company culture and values	Corporate culture and employee motivation	To understand company culture and judge employee motivation.	Evaluation of company vision, mission, and values.
Relationship with Stakeholders	Evaluate relationships with business partners, investors, local communities, etc.	Trust relationship with stakeholders	To judge relationships with stakeholders.	Evaluation by business partners and investors, evaluation of contribution to local communities.