PRICE EARNINGS MULTIPLE Definition

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PRICE EARNINGS MULTIPLE: The price-earnings ratio (P/E) is simply the price of a companys share of common stock in the public market divided by its earnings per share. Multiply this multiple by the net income and you will have a value for the business. If the business has no income, there is no valuation. If the common stock in not publicly traded, valuation of the stock is purely subjective. This may not be the best method, but can provide a benchmark valuation.

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POINT OF is a positional determinant or modifier in that it is either the starting or ending position, e.g. point of sales, point of delivery, point of collection, or point of completed production.

DISCOUNTING is the selling of accounts receivable, usually at less than full value, to a financial entity.

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