Фінансові терміни

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Price-earnings ratio (P/E)

The ratio of the price of a share to its earnings. The current P/E of a company can be compared with the past or with the ratios of competitors.

Used for 2 purposes:

  • To evaluate the company - whether it is under - or overvalued.
  • To assess the potential for growth - the higher the indicators, the higher the potential.