Price-earnings (P-E) ratio
The price-earnings (P-E) ratio is an oft-quoted measure of the ratio of the market price of each share of common stock to the earnings per share; computed by dividing the market price of the stock by earnings per share.The price-earnings (P-E) ratio reflects investor’s assessments of a company’s future earnings.
Price-earnings ratio = Market Price per Share of Stock ÷ Earnings per Share
Category: Accounting & Auditing
Previous: ← Leveraging/ Trading on Equity
Next: Payout ratio →
More from this Section
- Revenues
Revenues are the gross increase in owner’s equity resulting from business activities ... - Materials quantity variance
Materials quantity variance is the difference between the actual quantity times the standard ... - Premium
Premium is the difference between the selling price and the fact value of a bond/stock, ... - Carrying (or book) value method
Carrying or book value method is the method of recording the bond conversion that the ... - Accrual-basis accounting
Accrual-basis accounting refers to an accounting basis in which companies record transactions ...