Multiple

Formal

Another term for P/E ratio. Used for quoted companies. Calculated:- Price per share/Earnings per share. If share price is $10 and the company declares earnings of 50 cents then the P/E ratio is 20. This is often stated as ‘the company is valued at 20 times its annual earnings’, or ‘is valued at an earnings multiple of 20’. A key market measure for analysts and investors.

Real-world Example

An investor says a company is trading at a multiple of 8x earnings - meaning its market value is eight times its annual profit, a common shorthand for comparing valuations across similar companies.