Price-Earnings Ratio

Definition: Financial performance ratio used to analyze and compare the stock of companies in a given industry, market, or region of the country. To compute the P/E ratio, take the market price of a share of comDefinition: mon stock and divide by the earnings per share over a 12 month period. Definition: [crh] Shows the multiple of earnings at which a stock sells. Determined by dividing current stock price by current Definition: F="/?rd=earnings per+share">earnings per share (adjusted for stock splits). Earnings per share for the P/E ratio are determined by dividing Definition: earnings for past 12 months by the number of common shares outstanding. Higher multiple means investors haDefinition: ve higher expectations for future growth, and have bid up the stock's price.

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