Price to Earnings RatioTheprice/earnings ratio (P/E) is the best known of the investment valuation indicators. The P/E ratio has its imperfections, but it is nevertheless the most widely reported and used valuation by investment professionals and the investing public. P/E ratio is an off- quoted measure of the ratio of the market price of each share of common stock to the earnings per share. The price-earnings (P/E) ratio reflects the investors assessments of a companys future earnings. The industry average of P/E ratio is about 26 times in abroad market place. Here, throughout this report it was our endeavor to assess the investors investing decision. From 2006 to 2010 we represented the total 5 years P/E ratio of 8 insurance firm. Formula:

Price to Earnings Ratio (Times) Year Wise comparison

Company20102009200820072006

Delta0.068 0.045 0.034 0.0470.047

Fareast0.038 0.052 0.0390.044 0.036

Meghna0.022 0.0230.058 0.053 0.032

Popular0.039 0.0870.100.120.093

Pragati0.0490.0710.0940.0620.053

Prime0.0680.140.0590.0640.113

Progressive0.2710.4700.5410.6240.470

Rupali0.0720.0650.0510.0420.038

Inferences: A stock with a high P/E ratio suggests that investors are expecting higher earnings growth in the future compared to the overall market, as investors are paying more for today's earnings in anticipation of future earnings growth. Hence, as a generalization, stocks with this characteristic are considered to be growth stocks. Conversely, a stock with a low P/E ratio suggests that investors have more modest expectations for its future growth compared to the market as a whole.

So, we can asses Progressive life insurance is expecting higher earnings compared the overall market among 8 insurance firm. Rupali life insurance is also expecting a growth over the years and therefore, the investors are paying more of their earnings today for future earnings growth.

Price to sales ratio

A stock'sprice/sales ratio (P/S ratio) is another stock valuation indicator similar to the P/E ratio. The P/S ratio measures the price of a company's stock against its annual sales, instead of earnings. Like the P/E ratio, the P/S reflects how many times investors are paying for every dollar of a company's sales. Since earnings are subject, to one degree or another, to accounting estimates and management manipulation, many investors consider a company's sales (revenue) figure a more reliable ratio component in calculating a stock's price multiple than the earnings figure. Price to sales ratio tends to focus on the annual sales of a firm considering the each stock price. As we selected some insurance firm net premium is consider as the annual sales, in fact the annual sales of policies. The formula for the price to sakes ratio is given below.Formula:

Price to Sales Ratio (times) Year Wise comparison

Company20102009200820072006

Delta1.4441.6862.012.2772.521

Fareast5.2066.7423.9664.7525.807

Meghna4.5314.0617.0226.3235.485

Popular3.3335.4914.8273.3785.999

Pragati6.6210.335.6236.3954.821

Prime5.3358.7496.6715.4676.692

Progressive15.8222.1518.76219.01812.85

Rupali7.8976.5265.9835.9839.184

Inferences: From the ratio table we can derive that the investors of the respective firms would expect the stock price to be timed at their sales holding. Moreover we can say that Progressive life insurance would pay a higher amount of stock to hold their annual sales. But researchers conclude that "low price-to-sales ratios beat the market more than any other value ratio, and do so more consistently. So above analysis infer that Delta life insurance is in a good position in terms of sales to price (P/S) ratio. In addition Fareast and MSeghna life insurance also pay low portion for every Tk. to hold the annual sales.