The investment metric that's better than the P/E ratio

By Marcus Padley
Updated August 22 2017 - 4:00pm, first published 1:04pm
Treasury Wine Estates has a high P/E ratio but good growth potential. Photo: Jesse Marlow
Treasury Wine Estates has a high P/E ratio but good growth potential. Photo: Jesse Marlow

All investors know what a price/earnings (P/E) ratio is: it is the price of a share divided by the earnings per share in a particular year. So if a company share price is $1 and it is earning 10c a share this year, it is on a P/E ratio of 10x.

Subscribe now for unlimited access.

$0/

(min cost $0)

or signup to continue reading

See subscription options

Get the latest Bathurst news in your inbox

Sign up for our newsletter to stay up to date.

We care about the protection of your data. Read our Privacy Policy.