The E/V Ratio or Earning to Value Ratio is a key financial measure used to evaluate the stock performance of a company. It demonstrates how much money a company is earning per dollar of shareholder value. To calculate the ratio, divide the company’s total market capitalization (or book value) by its earnings before interest, taxes, depreciation and amortization (EBITDA). A high ratio indicates that the company is reaping greater returns on its assets, while a low ratio suggests there may be better opportunities elsewhere. By considering a company’s E/V Ratio, investors can gain an insightful understanding of its financial health and make more informed investment decisions.