Update: dictionary.com says twice a year... it continues with the definition with every two years: Biennial. In Britain, it seems, it might mean both... but in the U.S. biannual means twice a year.
We're talking about the price-to-earnings, or P/E, ratio. The current 12-month forward P/E ratio is 16.8, FactSet's John Butters said on Friday. This P/E ratio is above the 5-year average (13.8) and the 10-year average (14.1).. But just because stocks are expensive relative to their long-term average is no guarantee that prices are doomed to fall immediately.
If you are thinking about buying shares of a publicly-traded company, you might look at its price-earnings ratio. If the stock is selling for $60 per share, and the companyâs earnings are $2 per share, the ratio of price ($60) to earnings ($2) is 30 to 1. In common usage, we would say the P/E ratio is 30.. Financial ratio analysis can be used in two different but equally useful ways.