PRICE EARNINGS MULTIPLE Definition

Bookmark and Share

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.

Learn new Accounting Terms

CAPITALIZED COSTS are business expenses that are written off or deducted over a period of time through depreciation or amortization schedules.

TRANSLATION EXPOSURE, in foreign exchange, is to convert the results of foreign operations from the local currency to the home currency in the areas of paper exchange gains or losses; it is retrospective and short-term in nature.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.