PRICE TO EARNINGS RATIO Definition

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PRICE TO EARNINGS RATIO (P/E) is a performance benchmark that can be used as a comparison against other companies or within the stocks own historical performance. For instance, if a stock has historically run at a P/E of 35 and the current P/E is 12, you may want to explore the reasons for the drastic change. If you believe that the ratio is too low, you may want to buy the stock. You will generally find a P/E ratio based on either the prior reporting years earnings, or the earnings of the prior four quarters added together (LTM or Latest Twelve Months). Formula: Stock Price divided by the Earnings Per Share.

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UNDERWRITERS SPREAD see UNDERWRITERS DISCOUNT.

UNRESTRICTED ASSETS are assets / resources which are not restricted for use by legal or contractual requirements and may be used for any purpose.

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