2006-12-13 15:38:29 · 3 answers · asked by Anonymous in Business & Finance ➔ Investing
Price of a share/Earnings per share. Invert this and you will get the surrogate of Return on Investment for a company.
2006-12-14 04:34:01 · answer #1 · answered by Mathew C 5 · 0⤊ 0⤋
Price Earnings Ratio (or earnings multiple), measures the value of a share price. If the PE ratio is low, you will pay less for the stock than what you can expect to earn on it. The formula is:
PE Ratio= Price per Share / (Net Income / shares outstanding)
The PE ratio can give you a quick & dirty way to compare the value of one stock with another. Generally, the lower the PE ratio, the more sound an investment... however you need to compare apples to apples.
2006-12-13 23:52:16 · answer #2 · answered by dolphinsbarn 1 · 0⤊ 0⤋
Price / Earnings
2006-12-13 23:45:20 · answer #3 · answered by f1avor_f1av 3 · 0⤊ 0⤋