Introduction to the Price-to-Earnings Ratio

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Uploaded by on Aug 19, 2009

Price to Earnings Ration (or P/E ratio).

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  • amazing Sal. i love your way of explaining things. most people doing investment management are busy pulling in billions for their firms, but you take the time out to educate people like us and inspire us. thank you .

  • @sielecas, if the P/E ratio is negative, it means that the company's earnings (i.e. Net Income) is negative (think about this, the price component of the P/E ratio can't be negative because a company's stock price can't be negative, it can be 0 or positive). This is why, for some companies, it is not useful to look at P/E ratios. In this case, you could analyze the company based on other ratios such as Enterprise Value divided by Operating Earnings (or EBIT) ratio and others...

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  • stream of consciousness dude

  • o-o'....i...eUe LOVE MATH NOW U MADE ME LOVE MATH CONGRATZ

  • thank you

  • if you're investing don't just look at PE because there are numerous types of PE ratios where companies use different net income and profit figures so they're not all talking about the same thing. If the PE ratio is negative and the company is not a startup, then you have to wonder why isn't the ceo fired yet.

  • Yeah, great video! That 10% earning in buying a stock and opening up a saving account bank for 2% is a great example.

    I'll probably go with the 2%. I know from buying and selling stock with the transactions fees will just get me to negative like I did before. lol

  • Thank you so much. Your explanations are so clear.

  • You're the best teacher EVER on the internet.

  • Thanks for clearing up something I didn't fully understand.

  • thank you for this video, i'm not clear about number of share in this video. Is that the total share or only number share that sold to public, total shares belong to public.

  • i really appreciate the time you invested to make this video, very informative

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