Binance Academy
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What is the price-to-earnings ratio (P/E)?
Key takeaways
The price-to-earnings ratio (P/E) indicates how much investors are willing to pay for each dollar a company earns, allowing for an assessment of whether an asset may be overvalued or undervalued.
There are different types of price-to-earnings ratios (P/E), such as 'trailing', 'forward', 'absolute', and 'relative', which provide various perspectives but all require context such as industry standards and the company's growth potential.
The price-to-earnings ratio (P/E) indicates how much investors are willing to pay for each dollar a company earns, allowing for an assessment of whether an asset may be overvalued or undervalued.
There are different types of price-to-earnings ratios (P/E), such as 'trailing', 'forward', 'absolute', and 'relative', which provide various perspectives but all require context such as industry standards and the company's growth potential.
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