Re-rating your price earnings (P/E) multiple
Price earnings (P/E) multiples are commonly used by corporate financial managers as a measure of corporate performance and as a measure of corporate value. With this article an analysis of 74 companies is presented. Each company significantly changed its P/E multiple over a period of three years. Th...
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| Format: | Article |
| Language: | English |
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AOSIS
1993-06-01
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| Series: | South African Journal of Business Management |
| Online Access: | https://sajbm.org/index.php/sajbm/article/view/865 |
| Summary: | Price earnings (P/E) multiples are commonly used by corporate financial managers as a measure of corporate performance and as a measure of corporate value. With this article an analysis of 74 companies is presented. Each company significantly changed its P/E multiple over a period of three years. The analysis shows that a 2% improvement in operating profit margin or a 2% reduction in financial risk achieved a 1% improvement in the P/E multiple. To a lesser extent, an improvement in the current ratio and in net asset value also resulted in an improved P/E multiple. |
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| ISSN: | 2078-5585 2078-5976 |