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Random Financial Term

Price-to-Earnings Ratio (P/E)

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Income Statement, Most Recent Stock Price

P/E Ratio = Price per Share / Earnings Per Share

Think of the price-to-earnings ratio as the price you'll pay for $1 of earnings. A very, very general rule of thumb is that shares trading at a "low" P/E are a value, though the definition of "low" varies from industry to industry.

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