Term of the Day - price-earnings ratio
For Friday, January 16, 2009
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Term of the Day - price-earnings ratio
The most common measure of how expensive a stock is. The P/E ratio is equal to a stock's market capitalization divided by its after-tax earnings over a 12-month period, usually the trailing period but occasionally the current or forward period. The value is the same whether the calculation is done for the whole company or on a per-share basis. The higher the P/E ratio, the more the market is willing to pay for each dollar of annual earnings. The last year's price/earnings ratio (P/E ratio) would be actual, while current year and forward year price/earnings ratio (P/E ratio) would be estimates, but in each case, the "P" in the equation is the current price. Companies that are not currently profitable (that is, ones which have negative earnings) don't have a P/E ratio at all. also called earnings multiple or (P/E ratio).
Friday's Featured Funny Definition - tax refund
A tactic devised by politicians to give you back some of your own money in such a way that you are supposed to think it's a gift.
Click here to enjoy the the hilarious renditions we found for a number of popular terms!
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Quote of the Day
It is going to be the bargain of the century. It is going to look like we bought the island of Manhattan for $7.5 million and some beads. - eCompanies co-founder Sky Dayton on his $7.5 million purchase of the domain name Business.com in November 1999, in an Internet World interview
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