Earnings Multiple

Earnings Multiple - earnings multiple is a way of measuring how expensive a stock is.. It is calculated by using a mathematical formula where the stock market capitulations is divided by its after tax earnings. Covering a 12 month period in simpler terms the earnings multiple is the share price divided by the earnings per share. This can be used to show the history of the earnings multiple, by using the past 12 months. Or it can also be used as a tool to estimate future performance. The higher the earnings momentum, the more likely investors will contribute for future growth. UN profitable companies have no earning momentum.