What is the difference between the P/E ratio and the forward P/E ratio?
A)The P/E ratio uses the current share price while the forward P/E ratio uses the future share price.
B)The P/E ratio uses the current earnings per share while the forward P/E ratio uses the expected earnings per share.
C)The P/E ratio uses both the current price and earnings, while the forward P/E ratio uses both the future price and earnings.
D)The P/E ratio uses EPS while the forward P/E ratio uses net income.

Question

Quizplus · Accepted Answer

The P/E ratio measures a company's current stock price relative to its earnings per share (EPS) over the past 12 months, while the forward P/E ratio uses analysts' estimates of future earnings per share. Therefore, the difference between the two is that the P/E ratio uses historical earnings, while the forward P/E ratio uses estimated future earnings.

What Is the Difference Between the P/E Ratio and the Forward