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Next, **look at the numbers**. Key financial ratios, such as the price-to-earnings ratio (P/E), debt-to-equity ratio, and return on equity (ROE), can tell you a lot about a company's financial health. The P/E ratio, for example, helps you understand how much investors are willing to pay for each dollar of earnings. A high P/E ratio *could* indicate that the stock is overvalued, while a low one *could* suggest it's undervalued. However, don't rely on a single ratio. Always consider multiple metrics and compare them to industry averages and the company's historical performance.
