price-earnings ratio

[ prahys-ur-ningz rey-shoh, -shee-oh ]

noun

1. the current price of a share of common stock divided by earnings per share over a 12-month period, often used in stock evaluation. : P/E, p/e, PE, P-E, p-e

price-earnings ratio

noun

1. the ratio of the price of a share on a stock exchange to the earnings per share, used as a measure of a company's future profitability P/E ratio

Word History and Origins

Origin of price-earnings ratio¹

First recorded in 1960–65

Example Sentences

For EPS, an excellent guide is the CAPE, or cyclically adjusted price-earnings ratio, a measure invented by Yale economist Robert Shiller.

From Fortune