Price/Earnings Ratio

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Price/Earnings Ratio (P/E Ratio) ratio of the market price of a share of common stock to the company's earnings per share. It measures the value that the stock market places on $1 of a company's earnings.

Definitions

According to Managerial Accounting by Braun, Tietz (5th edition),

Price/Earnings Ratio (P/E Ratio). Ratio of the market price of a share of common stock to the company's earnings per share. It measures the value that the stock market places on $1 of a company's earnings.
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