financial ratio which is commonly referred to as the P/E ratio or multiple. This is the relationship of a company's stock price divided by earnings per share. It provides investors with an indication of how much is being paid (share price) for a company's earnings potential.
Market price divided by profit. The ratio shows how much investors are willing to pay for each dollar of that company's earnings.
The P/E ratio is a measure of the level of confidence (rightly or wrongly) investors has in a company. It is calculated by dividing the current share price by the last published earnings per share.
The market price of a stock divided by the earnings per share for a 12-month period. The P/E ratio gives an immediate valuation of the stock price compared to the corporate profits. The higher the P/E Ratio the higher the market value of the company`s earnings.
A figure indicating the investor confidence a company enjoys. This is calculated by the current share price divided by the most recent figure for the earning per share. The higher the figure, the more confident the investors.
The price/earnings (P/E) ratio of a fund is the weighted average of the price/earnings ratios of the stocks in a fund's portfolio. The P/E ratio of a company, which is a comparison of the cost of the company's stock and its trailing 12-month earnings per share, is calculated by dividing these two figures. In computing the average, Lipper weights each portfolio holding by the percentage of equity assets it represents, so that larger positions have proportionately greater influence on the fund's final P/E. A high P/E usually indicates that the market will pay more to obtain the company's earnings because it believes in the firm's ability to increase its earnings. (P/Es can also be artificially inflated if a company has very weak trailing earnings, and thus a very small number in this equation's denominator.) A low P/E indicates the market has less confidence that the company's earnings will increase; however, a fund manager or an individual with a 'value investing' approach may believe such stocks have an overlooked or undervalued potential for appreciation.
The current stock price divided by the last published earnings per share.
