9 ratios to check before buying a stock

There appears to be a rush to open new demat accounts and the daily volumes on the cash market crossed the Rs 1 lakh crore mark on 31 August. However, new investors should know the basic ratios used to value stocks before they jump in. ET Wealth explains how to use these tools.PE = Share price/Earnings per share (EPS)What does it tell you?What the market is willing to pay for a stock based on its past or future earnings. Lower the PE, cheaper