Price/earnings ratio
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Price/earnings ratio (alternatively known as P/E ratio) is a ratio calculated by dividing price per share by earnings per share. This shows how much investors are willing to pay per dollar of reported profits.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Price/earnings ratio (P/E ratio). Calculated by dividing price per share by earnings per share. This shows how much investors are willing to pay per dollar of reported profits.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
