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What is P/E Ratio (Price-to-Earnings)?
The ratio of a stock's price to its annual earnings per share; the multiple the market assigns to the company.
ExampleA stock with a P/E of 20 is priced at TRY 20 for every TRY 1 of earnings.The figures in the example illustrate the concept; they are not current market data.
Related terms
Earnings Per ShareA metric obtained by dividing a company's net income by the number of shares outstanding.P/B Ratio (Price-to-Book)The ratio of a stock's market value to its book value; it shows how the company is priced relative to itsEV/EBITDAEnterprise value divided by EBITDA; a multiple widely used to value companies in acquisitions.Growth StockShares of a company that grows its profit and revenue faster than the sector average and trades at a high P/EMarket CapitalizationThe share price multiplied by the total number of shares outstanding.Dividend YieldAnnual dividend divided by the share price; it shows the cash return of the stock.
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Frequently asked questions
What is P/E Ratio (Price-to-Earnings)?
The ratio of a stock's price to its annual earnings per share; the multiple the market assigns to the company.
What is P/E Ratio (Price-to-Earnings) called in Turkish?
In Turkish financial reporting and news, P/E Ratio (Price-to-Earnings) is called F/K Oranı (Fiyat/Kazanç).
Which concepts are related to P/E Ratio (Price-to-Earnings)?
The concepts most often mentioned together with P/E Ratio (Price-to-Earnings) are Earnings Per Share, P/B Ratio (Price-to-Book) and EV/EBITDA.
More terms in Fundamental analysis
Active ManagementAlpha (α)ArbitrageAsset AllocationBalance SheetBear MarketBeta (β)BondBull MarketCapital Expenditure (Capex)Cash FlowCorrelationDilutionDiscount RateDiscounted Cash FlowDiversificationDividendEarnings ReleaseEarnings SurpriseEnterprise Value (EV)EquityFair ValueGross Profit MarginHigh-Frequency Trading (HFT)Income StatementInsider TradingInternal Rate of ReturnInvestment InstrumentsLeverageLiquidityMargin CallNet Profit MarginOpen PositionPortfolioReturn on AssetsReturn on EquitySharpe RatioShort PositionSpreadStop-LossStop-Loss OrderValue StockVolatilityWeighted Average CostWeighted Average Cost of Capital