Price Earnings RatioP/E

The P/E ratio tells how many rupees investors are paying for each rupee of annual earnings. A P/E of 20 means the market price equals 20 years of current earnings.

A high P/E may reflect expectations of strong future growth, low perceived risk or simply overvaluation. A low P/E may mean the share is undervalued, or that the market expects earnings to fall. The ratio is meaningful only when earnings are positive and should be compared with peers in the same sector and with the bank's own history.

The inverse of P/E, earnings divided by price, is the earnings yield, which can be compared with fixed deposit or treasury bill rates. On NEPSE, P/E ratios of banks and other sectors are published daily and are widely used by investors together with price-to-book ratio and dividend yield. Because Nepali banks report annualised quarterly EPS, P/E based on early-quarter results can move sharply as the year progresses.

P/E अनुपातले लगानीकर्ताले वार्षिक आम्दानीको प्रत्येक रुपैयाँका लागि कति रुपैयाँ तिरिरहेका छन् भन्ने देखाउँछ। P/E २० भनेको बजार मूल्य हालको २० वर्षको आम्दानीबराबर हो।

उच्च P/E ले भविष्यको वृद्धिको अपेक्षा, कम जोखिम वा अधिमूल्यन देखाउन सक्छ; न्यून P/E ले अवमूल्यन वा आम्दानी घट्ने अपेक्षा देखाउन सक्छ। आम्दानी धनात्मक हुँदा मात्र यो अर्थपूर्ण हुन्छ र एउटै क्षेत्रका कम्पनीसँग तुलना गर्नुपर्छ। यसको उल्टो (आम्दानी / मूल्य) लाई आम्दानी प्रतिफल भनिन्छ। नेप्सेमा सूचीकृत कम्पनीको P/E दैनिक प्रकाशित हुन्छ।