TRADING GLOSSARY
Price-to-earnings ratio
The price-to-earnings ratio, or P/E, divides a company's share price by its earnings per share. It can use historical or forecast earnings and is generally not meaningful when earnings are negative; comparisons also depend on accounting methods and business context.
EXAMPLE
In a hypothetical valuation, a £30 share price divided by annual earnings per share of £2 gives a P/E ratio of 15.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure