PRICE/EARNINGS RATIO


Meaning of PRICE/EARNINGS RATIO in English

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 is 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.

Campbell R. Harvey. Hypertextual finance English glossary.      Английский словарь гипертекстовых финансов.