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income before amortization and taxes plus taxes. income before amortization and taxes plus amortization income after taxes mi
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Answer #1

P/E ratio is a valuation ratio. P/E means price to earnings ratio that is equal to (Price per share)/(Earnings per share)

P/E ratio is important because, it is used to compare a company with its peer companies (and industry average P/E ratio). Companies with lower P/E value are considered to be undervalued and better investments

Factors influencing P/E ratio:
P/E=(Price per share)/(Earnings per share)
=(Price per share)/(Net income/Number of shares outstanding)

P/E ratios are affected by the share prices, net income and shaares outstanding

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