PT - JOURNAL ARTICLE
AU - Bierman, Harold
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 - http://jpm.pm-research.com/content/28/4/57.short
4100 - http://jpm.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.