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Price/earnings p/e ratio

• Shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). Earnings per share for the P/E ratio are determined by dividing earnings for past 12 months by the number of common shares outstanding. Higher multiple means investors have higher expectations for future growth, and have bid up the stock's price.

• Measures the amount investors are willing to pay for each dollar of the firm's earnings; the higher the P/E ratio, the greater the investor confidence in the firm.

 
 

Follow this link for all the terms related to priceratio.

 
 Embedded terms in definition
 Bid
Common shares
Earnings per share
Earnings
Expectations
Firm
Future
Investor
P/e ratio
P/e
Shares
Share
Stock split
Stock
 
 Related Terms
 
Acid test ratio
Appraisal ratio
Asset/equity ratio
Average price earning ratio
Cash flow coverage ratio
Cash ratio
Common equity ratio
Constant payout ratio dividend policy
Conversion ratio
Cost benefit ratio
Current pe ratio
Current ratio
Days' sales in inventory ratio
Debt equity ratio
Debt ratio
Debt service coverage ratio
Debt to capital ratio
Debt to equity ratio
Debt/equity ratio
Dividend payout ratio
Earnings retention ratio
Expense ratio
Financial ratio
Fixed asset turnover ratio
Fixed charge coverage ratio
Funding ratio
Gold/silver ratio
Hedge ratio delta
Income replacement ratio
Interest coverage ratio
Inventory turnover ratio
Lagging pe ratio
Leading pe ratio
Long term debt ratio
Long term debt to equity ratio
Low price earnings ratio effect
Margin of profit ratio
Market book ratio
Market to book ratio
Operating profit ratio
P/e
P/e effect
P/e ratio
Payout ratio
Pe ratio
Pe ratio to eps growth
Plowback ratio
Preferred equity ratio
Price buy zone ratio
Price earnings ratio
Price to book ratio
Price to cash flow ratio
Price to earnings ratio
Price to sales ratio
Price/book ratio
Price/earnings multiple approach
Price/sales ratio
Projected pe ratio
Q ratio or tobin's q ratio
Quick acid test ratio
Quick asset ratio
Quick ratio
Ratio analysis
Ratio of exchange
Ratio of exchange in market price
Ratio spread
Ratio writes
Receivables turnover ratio
Retention ratio
Reward to volatility ratio
Sharpe ratio
Target dividend payout ratio
Target payout ratio
Times interest earned ratio
Total debt to equity ratio
Trailing pe ratio
Upside/downside ratio
Working capital ratio
Yield ratio

<< Price/earnings multiple approach Price/sales ratio >>

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