price to earnings (PE) ratio

Definition

Most common measure of how highly a firm's share is valued, it shows the premium the stockmarket puts on the stock of fast growth firms as compared with stock of those with sluggish growth-record. Formula: Market price of each share ÷ Earnings per share (EPS).

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price to earnings (PE) ratio is...

... in the Accounting & Auditing, Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.
... an essential investing term.

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