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To calculate the P/E ratio for a company, divide the current stock price by the company's earnings per share (EPS). This ratio helps investors assess the company's valuation and growth potential.

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4mo ago

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Is a negative PE ratio considered good for a company?

A negative PE ratio is generally not considered good for a company because it indicates that the company is not currently profitable.


Is a negative PE ratio considered a good indicator for a company's financial health?

A negative PE ratio is generally not considered a good indicator for a company's financial health. It suggests that the company is not making profits or is experiencing losses, which can be a cause for concern for investors.


How can one figure out the PE ratio for a company?

The Price/Earnings ration (PE ratio) is the price of stock divided by the past or future earnings. For example, if the price of Dell is $100 and the company earned $10 per share over the past 12 months, then the trailing 12 month ratio would $100/10, or 10.


What is the average PE ratio for companies in the SP 500 index?

The average PE ratio for companies in the SP 500 index is around 25. This ratio is a measure of a company's stock price relative to its earnings per share.


Is lower P E advisable for investments?

The PE ratio is a valuation metric that compares a company's price-earnings ratio with its projected growth rate. Small, high-growth stocks generally trade at higher PE's compared to the Large-caps. If the PE ratio is around 1, the company is considered fairly valued. A PE ratio that is much higher than 1 indicates an overvalued company, and a PE below 1 indicates an undervalued company. While the PE ratio can effectively provide insight in certain evaluations, it is limited by its overriding focus on earnings growth. Revenue growth, cash flow, dividends, debt, and numerous other factors are also critical in determining value. Additionally, while PE is useful for smaller companies it may be misleading for big-caps, since sustained growth is less important to their total returns. PE is most useful when supplementing a thorough discounted cash flow analysis or relative valuation.

Related Questions

Is a negative PE ratio considered good for a company?

A negative PE ratio is generally not considered good for a company because it indicates that the company is not currently profitable.


What is the Three factors that determine a company's PE ratio?

The three factors that determine a company's price-to-earnings (PE) ratio are the company's stock price, its earnings per share (EPS), and investor sentiment towards the company's future growth prospects. A high PE ratio suggests that investors are willing to pay more for the company's earnings, while a low PE ratio indicates that the company may be undervalued.


How do you calculate cost of equity when you only know total equity and PE ratio?

can't


Is a negative PE ratio considered a good indicator for a company's financial health?

A negative PE ratio is generally not considered a good indicator for a company's financial health. It suggests that the company is not making profits or is experiencing losses, which can be a cause for concern for investors.


How can one figure out the PE ratio for a company?

The Price/Earnings ration (PE ratio) is the price of stock divided by the past or future earnings. For example, if the price of Dell is $100 and the company earned $10 per share over the past 12 months, then the trailing 12 month ratio would $100/10, or 10.


What is the average PE ratio for companies in the SP 500 index?

The average PE ratio for companies in the SP 500 index is around 25. This ratio is a measure of a company's stock price relative to its earnings per share.


What is Costco's PE Ratio?

As of 4-27-07, Costco's PE ratio is 23.75.


What is the average PE ratio for the manufacturing industry?

one million dollars


Is lower P E advisable for investments?

The PE ratio is a valuation metric that compares a company's price-earnings ratio with its projected growth rate. Small, high-growth stocks generally trade at higher PE's compared to the Large-caps. If the PE ratio is around 1, the company is considered fairly valued. A PE ratio that is much higher than 1 indicates an overvalued company, and a PE below 1 indicates an undervalued company. While the PE ratio can effectively provide insight in certain evaluations, it is limited by its overriding focus on earnings growth. Revenue growth, cash flow, dividends, debt, and numerous other factors are also critical in determining value. Additionally, while PE is useful for smaller companies it may be misleading for big-caps, since sustained growth is less important to their total returns. PE is most useful when supplementing a thorough discounted cash flow analysis or relative valuation.


Define low PE ratio.?

A PE ratio is the price to earnings multiple for a stock. It is the current stock price divided by the earnings per share for the past 4 full quarters reported. So, if a stock is trading at $15 a share, the company earned $5 million dollars over the last 4 quarters and the company has 5 million shares outstanding, then the PE ratio would be 15 (15 / (5/5)). A low PE ratio then is a multiple that considers the stock cheap relatively, either to all other stocks, to other stocks in its industry, or to its growth prospects.


What is a PE ratio?

pe's ratio is excess:size reduction i think it stands for PHYSICAL EDUCATION which means physical= move education = learning


Is a PE ratio expressed as a dollar?

No. If it is a ratio (as it is) then it has no units: it is a pure number.