Price Earning ratio
Define the term Price Earning ratio and how it is calculated?
Expert
Price Earning ratio:
Price earnings ratio commonly known as P/E ratio helps in the assessment of the company’s current share price in relation to its earnings.
It is calculated as:-
We can say MPS÷EPS of the stock of the company.The P/E ratio can be calculated for the past year as well as for the future years. In both the situations the market price remains as the current stock price of the company. Earnings shall vary w.r.t the year – actual earnings or the projected earnings as the case may be. Example: if the company is trading at 60$ and the earnings of the last 12 months were 2$ then per share then the P/E ratio is 30.Interpretation:• The ratio reflects the price being paid by the market for each rupee of reported EPS. The ratio shall measure the expectations of the market and the investors. It shall depict the performance of the firm in the industry.• Shares which have high growth rate shall have high P/E ratio since investors are ready to pay more for them. But if the risk factor in the share increases the market price of the share gets affected adversely and so is the P/E ratio of the firm.• From the investment point of view of the investor the ratio shall help in deciding whether:--To purchase the shares of the firm or-To refrain from purchasing the shares.
COBCP: Capital outlay budgets are zero-based each and every year, thus, the department should submit a written capital outlay budget modify proposal for each fresh project or following phase of an existing project for which the department needs fundin
Describe the primary requirements for a successful JIT inventory control system? For a JIT system to be successful the supplier has to be willing and capable to deliver materials immediately and the quality of delivered materials has to be high.
Administration: It refers to the Governor's Office and those individuals, subdivisions, and offices reporting to it (example, the Department of Finance).
Describe why warrants are hardly ever exercised unless the time to maturity is small? Warrants are hardly ever exercised until the time to expiration is small since the market price of the warrant is higher than the exercise value. The holder o
Normal 0 false false
Define the term Baseline Adjustment or Baseline Budget: Baseline Adjustment: Also termed to as Workload Budget Adjustment. Q : Chartered bank loan policy Normal 0 Normal 0 false false
Why might investors overestimate the prospects of growth companies and underestimate value companies?
Describe compensating balances and why do banks needs them from some customers? Under what situation would banks be most likely to impose compensating balances? Compensating balances are funds that a bank needs a customer to maintain in a non-i
Continuing Appropriation: This is an appropriation for the set amount which is obtainable for more than 1-year.
18,76,764
1950183 Asked
3,689
Active Tutors
1420180
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!