online dictionaries of abbreviations

C E F I L N O P R T V W
PE PN

PE

Price/Earning; earnings multiple, multiple
A ratio used to measure how cheap or expensive share prices are. PE is probably the single most consistent red flag to excessive optimism and over-investment. It also serves, regularly, as a marker of business problems and opportunities. By relating price and earnings per share for a company, one can analyze the market's valuation of a company's shares relative to the wealth the company is actually creating. A PE ratio is calculated as:

Price per Share ÷ Earnings per Share

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