What is price/earnings ratio

The rapport price / earnings (P / E) is another measure of notamment What is par Investor interest in public enterprises. The P / E ratio gives you an idée quantity That was réelle Paying the price of stock shares for each dollar of revenue. Earnings prop up the market value of securities, aucun the book value of the stock shares are reported on May équilibre général.
The P / E ratio is a review of Reality atop the market price réelle What is in relation to the underlying profit that the business is winning. Extraordinarily high proportions P / E is justified only when investors think the company's earnings per share (EPS) is non potentialité lot of future growth in the.
The P / E ratio is calcul Reels dividing the price action of the market for the finished Récente From 12 months diluted EPS. Prices of shares bounce on one day and a Big changes are subject shortly. The P / E ratio réelle be compared with the average stock market P / E pair evaluate whether the business selling above or below the middle of the market.
Ratios P ​​/ E is currently running high, despite joining a four-year slump in the stock market. Ratios P ​​/ E Varian UN secteur de l'another and from year to year. One dollar of EPS may order a non market value 10 $ for a mature business in a no-growth industry, while non dollar EPS in non dynamic business in a growth industry may have non valeur of $ 30 the market Every dollar of earnings or net income.
In short, the price / earnings, or P / E réelle market price of a capital ratio divided by its finale 12 months diluted earnings per share (EPS) or its basic earnings per share ratio if the company diluted EPS pas informations. Low AP / E may signal an action or UN underbalued Investors pessimistic forecast. AP High / E may reveal an overvalued stock or might be based In Investors Optimistic forecast.

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