Equity Valuation
Price-to-Earnings Ratio
Definition
What is Price-to-Earnings Ratio?
Share priceThe market price at which one share is quoted or traded. divided by earnings per shareNet income attributable to ordinary shareholders divided by weighted average ordinary shares..
Example in practice
How This Looks in Practice
A ₦100 share with ₦10 EPS trades at 10 times earnings.
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Related Terms
Equity Valuation
Earnings Per Share
Net income attributable to ordinary shareholders divided by weighted average ordinary shares.
Equity ValuationDiluted Earnings Per Share
Earnings per share assuming potentially dilutive securities convert into ordinary shares.
Equity ValuationBasic Earnings Per Share
Earnings per share calculated using actual weighted average ordinary shares outstanding.
Cash Flow AnalysisOperating Cash Flow
Cash generated or used by a company's core operations.