P/E ratio
The share price divided by a year of profit per share: how many dollars you pay for each $1 the company earns in a year.
A $200 share of a company earning $10 a share has a P/E of 20: you pay $20 for every $1 of yearly profit. A higher P/E usually means buyers expect profits to grow. It’s a description, not a verdict: it doesn’t say whether a stock is cheap or expensive.
More investing words
Profit per share (EPS)Book value per shareFree cash flowCapital spending (capex)DividendDividend yieldPayout ratioShare buybackDilutionRevenue (sales)Profit marginDebtMarket capitalization10-K and 10-Q reportsStock split
For education only, not investment advice.