P/E ratio indicates how much investors are willing to pay for each dollar of a company's earnings
Image: Wikideas1, CC0, via Wikimedia Commons
price-to-earnings (P/E) ratio tells you
P/E ratio indicates how much investors are willing to pay for each dollar of a company's earnings
Related concepts
Cyclically adjusted price-to-earnings ratio
Price-to-Earnings Ratio (P/E) measures market value relative to earnings
Earnings per share
Earnings per share (EPS) = Net income / Shares outstanding
Quantity theory of money
MV = PY equation
Purchasing power parity
PPP adjusts for different price levels across countries
implied volatility tells you
Implied volatility indicates the market's expectation of future price movement
put-call parity states: C - P = S - K·e^(-rT)
Call price (C) minus Put price (P) equals Stock price (S) minus Strike price (K) multiplied by exponential decay factor (e^(-rT))
Educational content, not financial advice.
One email a day: 5 concepts + the 5 stories that matter →
Swipe through 100 ML concepts daily
Open TickerNews