Core Metrics
BeginnerWhat is the P/E ratio?
P/E is share price divided by earnings per share. It shows how much investors pay for each unit of current profit.
Quick Definition
P/E ratio = Share Price ÷ Earnings Per Share. It shows how much investors pay for each dollar of profit. A high P/E implies high growth expectations.
Use this concept with tools
Inflation-adjusted Return
Nominal return vs purchasing-power return.
CAGR
Calculate Compound Annual Growth Rate (CAGR) from start and end values. Convert between annualized returns and final investment amounts. Free CAGR calculator.
Compound Interest
Calculate compound interest growth with recurring contributions. See year-by-year balance breakdowns, total gains, and the power of compounding over time. Free online calculator.
Investor quotes to remember
“If you don't keep learning, others will surpass you.”
“The most dangerous words in investing are 'this time is different'.”
“I only bet when the odds are clearly in my favor.”
“Knowing what you don't know is more important than knowing what you do.”
Related concepts
What is the P/B ratio?
P/B ratio = Market Price ÷ Book Value Per Share. It compares what investors pay to what the company is worth on paper. P/B below 1 may signal undervaluation.
What is ROE?
ROE (Return on Equity) = Net Income ÷ Shareholders' Equity. It measures how efficiently management generates profit from capital. Above 15% is generally considered strong.
What does market capitalization mean?
Market capitalization = Share Price × Total Shares Outstanding. It represents the total market value of a company and classifies companies as large-cap, mid-cap, or small-cap.