According to Reckitt Benckiser 's latest financial reports and stock price the company's current price-to-earnings ratio (TTM) is 1595.58. At the end of 2010 the company had a P/E ratio of 16.0.
Year | P/E ratio | Change |
---|---|---|
2010 | 16.0 | -5.27% |
2009 | 16.9 | 26.27% |
2008 | 13.4 |
The Price/Earnings ratio measures the relationship between a company's stock price and its earnings per share. A low but positive P/E ratio stands for a company that is generating high earnings compared to its current valuation and might be undervalued. A company with a high negative (near 0) P/E ratio stands for a company that is generating heavy losses compared to its current valuation.
Companies with a P/E ratio over 30 or a negative one are generaly seen as "growth stocks" meaning that investors typically expect the company to grow or to become profitable in the future.
Companies with a positive P/E ratio bellow 10 are generally seen as "value stocks" meaning that the company is already very profitable and unlikely to strong growth in the future.