Price-Earnings Ratio - Personal Finance Glossary - E-PersonalFinance

Price-Earnings Ratio - Personal Finance Glossary - E-PersonalFinance

Price-Earnings Ratio

A "P/E ratio" refers to a corporation's stock price divided by past ("trailing") annual earnings per share or expected ("forward") annual earnings per share. For example, if IBM stock sells for $100 a share and has earned $10 a share in the past year, IBM stock sells at 10 times trailing earnings (a P/E ratio of 10).

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