Wes Johnson, CFP® discusses indicators you can use to determine if we’re heading towards a recession on NPR’s South Carolina Business Review.
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The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.