Definition of P/E Ratio

Financial Terms Beginning with P

What is a P/E Ratio

The price-to-earnings ratio, also known as a P/E ratio, is a financial ratio used by analysts and investors for valuing a company. The P/E ratio is calculated by dividing the share price of a stock by the earnings per share (EPS). Using a P/E ratio is one the most common methods for valuing shares of stock.

A high P/E ratio could be a signal that the stock price of a company is overvalued. It could also indicate that investors are expecting high growth rates in the future.

There are two main types of p/e ratios, the trailing p/e ratio, which use actual earnings per share results, and the forward p/e ratio, which uses projected earnings per share.

GlobEx Markets Financial Dictionary of Terms, Phrases and Concepts

The GlobEx Markets financial dictionary is a reference resource that provides the definitions and explanations of various financial terms, phrases and concepts that are used in international finance and global investing. It includes a broad range of financial terms, such as those related to stocks, bonds, currencies, commodities, options, futures, crypto and much more.

A financial dictionary can be useful for anyone who wants to learn more about finance and investing, or who works in the financial industry. It can help clarify the meaning of technical terms and the language used in financial publications, reports and other sources.

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There are several benefits to using the GlobEx Markets financial dictionary, including:

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Overall, the GlobEx Markets financial dictionary can help improve your understanding of international finance and global investing. It is a valuable tool for anyone who works in the financial industry or who wants to improve their financial literacy.

Related Investment Terms

Earnings per Share

Technical Analysis

Value Investing

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