👉 Investor math is a framework used to evaluate potential investment opportunities by quantitatively assessing various financial metrics and projections. It involves calculating key ratios like the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and discounted cash flow (DCF) to gauge a company's valuation relative to its earnings, assets, or projected cash flows. By comparing these metrics against industry benchmarks and historical data, investors can determine if a stock is overvalued or undervalued. Additionally, investor math considers the company's growth prospects, profitability, debt levels, and market conditions to forecast future performance and assess the potential return on investment. This analytical approach helps investors make informed decisions, balancing risk and reward to maximize their chances of achieving positive returns.
