Relative P/E Ratio

Categories: Stocks, Fundamental Analysis,

The ratio of the profits over earnings of a business to the ratio of the profits over earnings in the market. The percentage of profits is divided by the percentage of earning. A relative P/E can be measured the following ways: terms of current earnings, trailing, and forward earnings. However, only one of these must be used over the long term for comparing the firm and the market for consistent accuracy.