The price-earnings ratio is the second major valuation ratio profiled in Axel Tracy's book, Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyse Any Business on the Planet.

Among the important tools available to investors is ratio analysis. For example, we commonly, perhaps even unconsciously, use the price-earnings ratio as a way of evaluating a stock's price and ...

P/CF multiples are calculated with a similar approach to what is used in the other price-based metrics. The P, or price, is simply the current share price of the firm. In order to avoid volatility in ...

Natalya Yashina is a CPA, DASM with over 12 years of experience in accounting including public accounting, financial reporting, and accounting policies. Jared Ecker is a researcher and fact-checker.