Meaning of price earnings ratio

 

 

 

Price earnings ratio

 

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Business glossary

 

Meaning of term price earnings ratio :

 

The price earnings ratio is a ratio that measures the earnings from a share compared to the price of the share. It therefore measures the return available from buying shares. It is calculated by dividing the market price of the share by the earnings per share. Higher ratios are better as they reflect higher returns.

 

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Price earnings ratio

 

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Meaning of term price earnings ratio