Asset Valuation Tool
The asset valuation tool works as follows:
- User Inputs:
Current Price of the Asset: The user enters the current market price of the asset.
Earnings Per Share (EPS): The user enters the earnings per share of the asset (a key metric for valuation). - Calculations:
The tool calculates the P/E (Price-to-Earnings) ratio using the formula:
P/E Ratio
Price
EPS
P/E Ratio=
EPS
Price
Result Display:
The result is displayed as a message indicating whether the asset is overvalued, undervalued, or fairly valued.
How to Use It:
Open the HTML file in a web browser.
Enter the current price and EPS in the respective input fields.
Click the “Evaluate” button.
The tool displays the P/E ratio and a brief analysis of the asset’s valuation status.
This tool is helpful for a quick assessment based on the P/E ratio, which is commonly used in finance to judge the relative valuation of an asset compared to industry standards or historical averages.
Evaluation Logic:
The tool uses the calculated P/E ratio to determine if the asset is overvalued, undervalued, or fairly valued:
Overvalued: If the P/E ratio is greater than 20, the asset might be overvalued.
Undervalued: If the P/E ratio is less than 15, the asset might be undervalued.
Fairly Valued: If the P/E ratio is between 15 and 20, the asset seems fairly valued.