ltheron40
Nov 12, 2011, 10:30 AM
Another term for the price/earnings ratio is?
dstyers
Dec 4, 2011, 07:09 PM
The price/ earnings ratio is a valuation ratio of a company's current share price compared to its per-share earnings.
Calculated as:
Market Value per Share/
Earnings per Share (EPS)
For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). It is also sometimes known as "price multiple" or "earnings multiple".