Feb. 4, 2021, 10:18 p.m.
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
A high P/E ratio could mean that a company's stock is over-valued, or else that investors are expecting high growth rates in the future.
It signifies the amount of money an investor is willing to invest in a single share of a company for Re. 1 of its earnings.
For instance, if a company has a P/E Ratio of 40, investors are willing to pay Rs. 40 in its stocks for Re. 1 of their current earnings.
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).
A high P/E ratio could mean that a company's stock is over-valued, or else that investors are expecting high growth rates in the future.
It signifies the amount of money an investor is willing to invest in a single share of a company for Re. 1 of its earnings.
For instance, if a company has a P/E Ratio of 40, investors are willing to pay Rs. 40 in its stocks for Re. 1 of their current earnings.