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.
Why is the coefficient of variation frequently a better risk measure while comparing different projects than the standard deviation?Whenever we desire to compare the risk of investments which have different means, we employ the coefficient of va
Feasibility Study Report (FSR): This is a document proposing an information technology project which contains analyses of options, cost estimates, and some other information.
Bill: It is a draft of proposed law represented to the Legislature for performance. (A bill has bigger legal formality and standing than a resolution.) OR An invoice, or document statement, of an amount owing for s
Normal 0 false false
Organization Code: The four-digit code allotted to each state governmental entity (and at times to exclusive budgetary programs) for fiscal system aims. The organization code is the initial segment of the budget item or appropriation
State time dimensions of the income statement, the balance sheet, and the statement of cash flows? Describe. The income statement is such as a video: This measures a firm's profitability on a period of time (that can be a week, a
Executive Branch: One of the three branches of state government, accountable for administering and implementing the state's laws and programs. The Governor's Office and those individuals, departments, and offices reporting to it (that
Special Items of Expense: It is an expenditure category which covers nonrecurring big expenditures or special aim expenditures which usually need a separate appropriation (or else need separation for clarity).
If a stock with a standard deviation of 7% is combined with a stock that has a standard deviation of 5%, what will the standard deviation of the portfolio be? A) 6%B) Greater than 6%C) Less than 6%D) There is not
18,76,764
1931356 Asked
3,689
Active Tutors
1445002
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!