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Finance GlossaryP/E Ratio (Forward)
P/E Ratio (Forward)
Definition of P/E Ratio (Forward)
The Forward Price to Earnings (Forward P/E) Ratio is a valuation metric that compares the current stock price of a company to its estimated earnings per share (EPS) for the next four quarters or the next fiscal year. The formula is: Forward P/E = Current Share Price/ Estimated Future EPS. Indian analysts and investors often use the Forward P/E to forecast how expensive a stock is, given what the company is expected to earn in the future, which gives a more relevant picture for making investment decisions than historical earnings.
Related Terms
Cost Inflation Index
A Cost Inflation Index or CII is used to calculate a financial security’s price after adjusting for inflation.
Cost Of Carry
Cost Of Revenue
Cover Order
Covered Call Option
Covered Interest Arbitrage
Covered Put
Cross Currency
Currency Futures
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Currency Trading
Current Assets
Current Liabilities
Current Ratio
Custodian
Cyclical Stocks
Cost Of Carry
Cost Of Revenue
Cover Order
Covered Call Option
Covered Interest Arbitrage
Covered Put
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Currency Futures
Currency Options
Currency Trading
Current Assets
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Custodian
Cyclical Stocks
Mutual Fund
A mutual fund is a financial instrument that collects funds from investors and invest in different assets, like equity, bonds, etc. A professional fund manager handles the investments, making it easier for individuals to invest and spread their risk without needing deep market knowledge.
Oversold
Oversold is a term that is used to denote that a security's price has dropped sharply, and the broader market sentiment indicates a high probability of rebound or price correction in the near term. It implies that the selling pressure is likely to be nearing exhaustion. Traders use indicators such as the Relative Strength Index (RSI) to detect oversold levels. When the RSI level is below 30, the particular security is oversold. An oversold condition implies that the price decline may be due for a pause or reversal, but it is not a sure sign of a price increase.
Consumer Price Index
The Consumer Price Index (CPI) measures how costly goods and services have become over time. It is calculated by measuring the weighted average of the percentage change in the price of a basket of goods and services.
If the CPI increases, it means that inflation is on the rise. In India, the CPI replaced Whosale Price Index (WPI) as the primary measure of inflation in 2013.
If the CPI increases, it means that inflation is on the rise. In India, the CPI replaced Whosale Price Index (WPI) as the primary measure of inflation in 2013.
Holdings
Holdings are the financial assets in the portfolio of an investor or company. They can include stocks, bonds, derivatives, commodities, currencies, and more.
Balance Sheet
A balance sheet is a financial statement that reveals a company’s assets, liabilities, and shareholders’ equity. It can help current and potential investors understand the financial health of a company.
These are some of the key components of a balance sheet:
These are some of the key components of a balance sheet:
- Current assets : Cash & cash equivalents, marketable securities, accounts receivable, inventories, prepaid expenses, and other liquid assets
- Fixed assets : Property, equipment, furniture, machinery, software, and other intangible assets
- Current liabilities : Short-term debt, unearned revenue, accounts payable, other accrued expenses & liabilities
- Long Term liabilities : Long-term loans, bonds, and others
- Shareholders’ equity : Paid-in capital and retained earnings
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