What does the P/E ratio reflect?
Fundamental analysts use ratios to evaluate the intrinsic value of a stock. One of the most common ratios they use to do this is the P/E ratio. In this article we discuss what the P/E ratio reflects and how to calculate it. What is the P/E ratio? This ratio looks to see how expensive a stock is and also how much stock investors are willing to pay for each dollar of earnings. Formula: Price to earnings ratio = current share …