P/E Ratio

P/E Ratio stands for Price Earnings Ratio which provides an insight into the extent that the current share price of a company is attractive to investors. It basically measures the price an investor is paying for $1 of the company's earnings.

 

P/E ratio = Current Price Per Share/Earnings Per Share

 

This indicator is included in the book: Key Performance Indicators - the 75+ measures every manager needs to know, which contains an in-depth description of this KPI, as well as practical advice on data collection, calculations, target setting, and actual usage.

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