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.
Reversion: The return of the unused part of an appropriation to the fund from which the appropriation was made, usually two years (that is, four years for federal funds) after the last day of an appropriation’s accessibility period. The Budget A
Describe the risk-return relationship.The relationship among risk and required rate of return is term as the risk–return relationship. This is a positive relationship since the more risk assumed, the higher the required rate of retur
Describe decision rule for accepting or rejecting proposed projects while using internal rate of return? Whenever the internal rate of return is greater than or equal to the required rate of return, the hurdle rate, the project is accepted. Whi
Expenditure Authority: The authorization to make expenditure (generally by a budget act appropriation, provisional language or some other legislation).
Normal 0 false false
Question 1 A. What per visit price must be set for the service to break even? To earn an annual profit of $100,000? (10,000 * 5.00 - $500,000 - 50,000 = 0 Q : Describe financial ratio Describe Describe financial ratio? This is a number which expresses the value of one financial variable relative to another. Put more cleanly, a financial ratio is the result you obtain when you divide one financial number by another. Computing an
Describe financial ratio? This is a number which expresses the value of one financial variable relative to another. Put more cleanly, a financial ratio is the result you obtain when you divide one financial number by another. Computing an
What are the methods to determine Promotional Budget? Explain in brief.
Describe two patterns of cash flows for a share of common stock. How does the market find out the value of the most common cash flow pattern for common stock?Cash flows for share of common stock contain dividend payments and the price attained f
18,76,764
1932225 Asked
3,689
Active Tutors
1420486
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!