Financial Statements

What is the Price / Earnings ( P/E ) Ratio ?

The P/E Ratio reflects the amount investors are willing to pay for each dollar of the business's earnings. The higher the P/E Ratio, the greater the investors’ confidence in the firm. The P/E ratio represents the "multiple" that the stock market places on the earnings of a company. Market price per share of common stock divided by Earnings per share of common stock = P/E Ratio.

Need Professional Help?

If you need help with "Financial Statements" or have other tax questions, we can help you find a local licensed tax preparer for a free, no-obligation consultation.