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Glite Dictionary
P/E ratio

P/E ratio

3 6.4
A number that compares a company's share price with the profit it makes for each share
  • noun
  • Specialized
: relación P/E
  • The company's stock has a P/E ratio of 20, indicating its price is high relative to earnings.
  • P/E ratio stock
  • P/E ratio of the S&P
  • average P/E ratio

Examples

  • Currently, the average trailing P/E ratio of the S&P 500 index is around 14.

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  • Forward earnings rose for nine of the 10 sectors in September, but P/E ratios rose for all 10 sectors.

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  • Unable to grow their earnings to keep up with the high P/E ratio, the stock price has remained flat.

    Blog text (11)

  • Tyson has the lowest P/E ratio of the four companies featured here.

    Blog text (14)

  • And on that basis, the trailing P/E ratio is now 15.5x.

    Blog text (34)

  • In 2007, P&G had a P/E ratio of over 19, which exceeded the industry average of 16.69.

    Blog text (11)

  • The forward P/E ratios for the two indexes are closer to 13.

    Blog text (30)

  • The company has a market cap of $2.89 billion and a P/E ratio of 5.40.

    Blog text (11)

  • The average dividend yield has a value of 2.59 percent, and the P/E ratio is 20.40.

    Blog text (4)

  • Facebook currently trades at a forward P/E ratio of about 34.5 and a 5-year estimated PEG ratio of 1.65.

    Blog text (32)

Synonyms

price-to-earnings ratio
vsP/E ratio
  • Specialized
1 7.2

A number that shows how expensive a company's share is compared with its profit per share

is the same concept but written as a short abbreviation

Surface Forms

P/E ratio singular
P/E ratios plural

Morphology

P/E + ratio

The headword contains a technical abbreviation 'P/E' (not a normal lexical item) while 'ratio' clearly signals a numeric relation; the slash suggests a division of two quantities. However, understanding requires domain-specific knowledge that P = price and E = earnings, so an average B1 learner who only knows 'ratio' would likely not derive the precise financial meaning, making it partially but not fully transparent.

Etymology

P/E ratio is short for the letters P and E, which stand for the share 'price' and the company's 'earnings'. Think of it as how many years of profit you pay for one share: a P/E ratio of 10 means you are paying ten years of earnings, so the number helps people see if a stock is 'expensive' or 'cheap'.