IN PLAIN ENGLISH
Share price divided by earnings per share — what you pay for £1 of a year's profit.
WHERE YOU MEET IT
P/E (TTM) in a holding's Valuation section.
WATCH OUT FOR
Only compare P/Es between similar businesses. It says nothing about debt or quality.
FULL DEFINITION
Price-to-Earnings Trailing Twelve Months. It uses the last 12 months of actual earnings to calculate the ratio.
EXAMPLE
Price is $50, last year's earnings were $5. P/E (TTM) = 10.
HOW IT'S CALCULATED
P/E (TTM) = share price ÷ earnings per share over the trailing twelve months. Supplied by the market data provider. It is undefined or meaningless for companies with negative earnings.
EXPLAINED IN
Educational content only. It is not personal financial advice.