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.
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
what are the advantages and disadvantages of working capital source of finance
Merger: A merger takes place whenever two companies unite to form a single company. This is very alike to an acquisition or takeover, apart from that the existing stock-holders of both companies comprised retain a shared interest in the latest corpora
Give two instances of types of companies likely to contain high operating leverage. Give examples. Long distance telephone companies & electricity generating companies are likely to contain operating leverage. These two kinds of companies
Planning Estimate (PE): A document employed to record and monitors those present and budget year expenditure adjustments comprising budget change proposals accepted for inclusion in the Governor's Budget. PEs is broken down by department, character, f
Augmentation: An authorized raise to a formerly authorized appropriation or allotment. This augment can be authorized by the Budget Act provisional language, control sections, or other legislation. Generally a Budget Revision or an Ex
Why do businesses spend effort, time and money to generate forecasts? Describe.Businesses succeed or fail based on how well prepared they are to deal along with the situations they confront in the future. Hence they expend considerable sum
How are financial trades made on a planned exchange?Each of exchange listed security is traded at a particulate location on the trading floor called the post. The trading is supervised through specialists who act either as brokers (bringing toge
Capital Outlay (CO): A character of expenses of funds to obtain land, plan and build new buildings, expand or transform existing buildings, and/or purchase tools associated to such construction.
Tort: It is a civil wrong, other than a breach of contract, for which the court awards indemnity. The traditional torts comprise malpractice, negligence, assault and battery. Lately, torts have been widely expanded such that the interference with a co
18,76,764
1922871 Asked
3,689
Active Tutors
1439201
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!