Multiples
Also found in: Dictionary, Thesaurus, Medical, Idioms, Encyclopedia, Wikipedia.
Related to Multiples: Common multiples
Multiples
Another name for price/earnings ratios.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Price-Earnings Ratio
The price of a security per share at a given time divided by its annual earnings per share. Often, the earnings used are trailing 12 month earnings, but some analysts use other forms. The P/E ratio is a way to help determine a security's stock valuation, that is, the fair value of a stock in a perfect market. It is also a measure of expected, but not realized, growth. Companies expected to announce higher earnings usually have a higher P/E ratio, while companies expected to announce lower earnings usually have a lower P/E ratio. See also: PEG
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved