What is the price/earnings ratio (P/E ratio)?

The price-earnings ratio is a ratio that expresses the market price of a share in relation to earnings per share.

The price-earnings ratio can also be used as a key figure for equity ETFs. It is shown in the factsheets of the ETF providers and relates to the past 12 months.

The forward P/E ratio describes the ratio of the share price to the expected future earnings per share, usually for the next 12 months.