Jan 18 2011

What is a P/E ratio?

Category: Finance

Answer:

The P/E ratio or price-to-earnings ratio is term that is used to compare the amount paid for a particular share of stock to a company‚Äôs earnings per share. This ratio is one of many methods used by investors to gauge the price of a stock relative to the income that is generated by the company. The P/E ratio is also often referred to as the “multiple”, because it gives an insight as to how much investors are willing to pay per dollar of earnings.

P/E Ratio


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