PT  - JOURNAL ARTICLE
AU  - Harold Bierman, Jr
TI  - The Price-Earnings Ratio
AID  - 10.3905/jpm.2002.319854
DP  - 2002 Jul 31
TA  - The Journal of Portfolio Management
PG  - 57--60
VI  - 28
IP  - 4
4099  - https://pm-research.com/content/28/4/57.short
4100  - https://pm-research.com/content/28/4/57.full
AB  - The P/E ratio is a widely used tool for valuation of common stock. One of its prime virtues is the simplicity of calculation. In this article the author suggests that in some situations a more complex calculation, but analogous to a P/E ratio, gives more useful information. The two situations reviewed are for a firm with an abnormal liability and for a firm with an abnormal amount of cash available for distribution. In these situations, adjustments to the P/E calculations of the type illustrated are desirable.