The price-earnings ratio (PE ratio) tells us
A) whether assets are liquid.
B) whether debts are too high.
C) the impact of inflation.
D) whether the shares are a good investment in terms of earnings.

Question

Quizplus · Accepted Answer

The price-earnings ratio (PE ratio) is a valuation metric for stocks, comparing a company's share price to its earnings per share, which helps investors assess if the stock is a good investment relative to its earnings.

The Price-Earnings Ratio (PE Ratio) Tells Us