Friday, November 19, 2010

What price - earnings ratio



Winner/price (P/E) is a measure which is of particular interest to investors in State enterprises. P/E ratio gives you an idea of how much you're paying in the current price of stock shares for every dollar earn their living. Gains support the market value of stock shares, not the book value of the stock actions reported in the balance sheet.




P/E ratio is a reality check on how high the current market price is underlying profit that the company is gagnant.Les extraordinarily high P/E ratios are justified only when investors think that profit per share (EPS) company a lot of potential increase in the future.




P/E ratio is calculated by dividing the current price of the stock market with the most recent 12 months diluted stock shares EPS.Prix bouncing around from day to day and are subject to major changes at short notice. Current P/E ratio should be compared to the average stock exchange P/E in order to assess if the company selling above or below the average market.




P/E reports are running high, despite four years on the stock market collapse.P/E ratios vary from industry to industry and from one year to another.One dollar EPS can be ordered only a value merchant $10 for mature companies in a sector were, a dollar of EPS in a dynamic company in a growth sector may have a market value of $30 per dollar of earnings, net income or.




To summarize, the ratio price/earnings or P/E ratio is the current market divided capital stock price by of dilute its end 12 months per share (EPS) or salary per action basis, if the undertaking does not report EPS dilué.Un low P/E can report a underbalued stock or pessimistic forecasts by the investisseurs.Une high P/E may reveal an overvalued stock or could be based on an optimistic forecast by investors.


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