Price-to-earnings ratio (PE ratio)

The price to earnings ratio, or PE ratio, compares a company's share price to its earnings per share. You calculate it by dividing the share price by annual earnings per share. A PE of 15 means you're paying £15 for every £1 of annual profit the company generates. Investors use PE ratios to judge whether a stock looks expensive or cheap compared to its earnings and historical valuation.

With the AJ Bell share screener, you can use the advanced filter for PE ratio to find shares.

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Popular terms

Alternative Investment Market (AIM)

The junior marketplace of the London Stock Exchange, acting as a way for small and medium-sized growth companies to access investors. There are weaker regulatory requirements for companies that want to list on the AIM compared to the Main Market, which can mean less protection for investors.

AJ Bell offers dealing within the AIM market via our investment platform.

Aquis Stock Exchange

An alternative junior marketplace to the Alternative Investment Market (AIM), offering a place for small and typically less mature companies to trade their shares. This is separate to and not owned by the London Stock Exchange.

Companies listed on the Aquis Stock Exchange tend to be at a very early stage of development with low levels of liquidity and little or no trading history, making them harder to buy or sell – and therefore a riskier investment.

AJ Bell offers dealing within the Aquis Stock Exchange via our investment platform.

Ask price

The ask price represents the lowest amount a seller will accept when you're looking to purchase a share or investment. When you're ready to buy through your AJ Bell account, this is the figure you'll pay. It's set by sellers in the market, and you'll see it displayed clearly before you confirm any purchase. The ask price moves throughout the trading day as market conditions change, and different sellers enter or exit positions.

Learn more about how investments are priced