Price Earnings Ratio Graphic

Price Earnings Ratio (Derived)

Helps You Identify If

A PE Ratio is based upon the assumptions used to create the EPS measure, this calculation is also based upon a strict asset value of the business and relates to the number of shares that are assumed to have been issued, and is then related to the EPS measure outlined above. Generally, the higher the Price/Earnings ratio the more likely it is that the company will be expected to further improve its performance in future years. Watch for changes over time, as value could be being eroded within your business

What Other Numbers Can I Check?

Further Reading


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