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Price to Earnings Ratio

Price to Earnings Ratio Definition

P/E Ratio is calculated by dividing the market price of common stock by its annual earnings per share. Price-to-Earnings is a key ratio used to determine how the market is pricing a company’s common stock. A stock with a low P/E Ratio is often seen as a better value than one with a higher P/E.

RELATED TERMS
Earnings per Share (EPS)
RELATED CATEGORIES
Accounting
Earnings







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