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Dividing the current price per share of a publicly traded company by the earnings per share of that company provides the P/E or price to earnings ratio. The P/E ratio allows investors to determine the real "price" of a company's common shares since investors pay more for companies whose growth outpaces the competition. If two companies both earn $1.00 per share, the company with the greater perceived future growth opportunities (everything else being held constant) with fetch a greater price for one share of its common stock. In addition the P/E ratio may help identify value opportunities when comparing companies within a particular sector.
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What is the pe ratio of a business?
Is the Price/Earnings ratio. You can find it by taking the market price per share and dividing it by the annual earnings per share.
How do you find the price index?
by dividing current year price to base year price
What is the current FTSE price earnings ratio?
http://www.ftse.com/Indices/UK_Indices/Values.jsp
Why did Arthur Burns say that companies use earnings management?
The management people running those companies try to meet the analysts' earnings projections to (i) maintain their credibility with the analyst community, and (ii) maintain the relative price of the company's stock.
What affect does earnings per share have on price earnings ratio?
the price earnings ratio is simply earnings-per-share divided by the share price. OOPS! I got that upside down! It is the share price divided by the earnings per share. The earnings figure might be for the trailing twelve months (ttm) or earnings estimated for the next four quarters.
How can stock prices go up even when companies are not making money?
There is a misconception between stock price and companies profitability or lack there of. The price of a stock is public perception of the companies value. The earnings (profits) the company reports represents the strength and market value of the company.
What is the price-earning?
If you mean the price-earnings ratio. It is the price per share of a common stock divided by the annual earnings of the stock.
The blank percent is found by dividing the annual per share dividend by the closing price per share?
By dividing the annual per share dividend by the closing price per share, the figure found is the P/E ratio. P/E ratio stands for price to earnings ratio, and the figure shows how much per share investors earn.
What is the price to earnings ratio?
Price Earnings ratio is a measure of market valuation (capitalization) and is a ratio between the price per share to the earnings per share. Price Earnings ratio is affected by a number of factors- the growth rate of the company, expectations of future growth rate , earnings- both retained and dividends paid out, other risk factors, economic conditions etc. Generally, young growing firms with multitude of growth opportunities tend to have a higher P/E. The market lets fast growing companies (tech) usually have a higher p/e ratio. due to the fact that the market perceives the company that is growing fast, will have increased earnings in the future. For example if a company is a trading at $1 per share, and has earnings of a dime per share. Then the company's p/e ratio is 10. As a rule anything (p/e ratio) under 20 is good and over 20 is getting expensive. Value stocks have a low p/e ratio. but maybe grow at a slower pace than a tech. firm where p/e ratio of 30 to 40 is more common.
What is the price-earning relationship?
The Price-to Earnings Ratio or P/E-Ratio is a maesure for the valuation of a stock or a bond. The price of a stock is divided by the earnings per share (net profit divided by the number of shares outstanding). The PE-Ratio of Bonds is the reziprocal value of the bonds' yield, which depends on paymants and on the current price of the bond.The lower the PE Ratio is the cheaper is the stock regarded as. Valuations depend on the industy, the earnings growth and other fundamental or technical influences, like rumors or aquisitions. Stocks that are more "popular" than others tend to be valuated higher than other stocks. It is also important to know whether the expected earnings turn out to be realistic or may be too high. Therefore it is much more reasonable to work with the companies' real earnings of the last year. Except of the PE-Ration there are a lot of other factors to be considered before finally investing your money in any stock or bond like earnings stability, growth and the companies' debt.
What is the main motivations for companies to engage in earnings management?
Mainly to: 1.0 Ensure that the revenue stream is consistant with the cost structure, and so ensure that the company remains profitable 2.0 Analysis of the earnings will allow for the timeous implementation of plans, if the earnings fall 3.0 Earnings management also allows the company to check ratios such as price/earnings etc, so as to ensure investor interest in the company's shares
Does maximization of the company share price depends upon the level of earnings per share that is achieved?
share prices of companies depend on level of earnings of the company,but maximization of share prices depends not only on earnings but also on riskyness of the company's projects, its preferred capital structure ,its corporate responsibility programs,etc
