Earnings Multiplier

An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used to discount future earnings, and allows investors to compare expected growth to an amount of money invested over the same period at current rates.

The earnings multiplier is similar to a discounted cash flow in that future earnings are rolled back to determine how much they are worth in today's dollars. Investors use the earnings multiplier to figure out how much a company is worth, today, based on how it is expected to grow in the future.


Investment dictionary. . 2012.

Look at other dictionaries:

  • multiplier — 1. a number applied by multiplication to a multiplicand to produce a figure for damages in cases of future loss, which will provide an appropriate annuity equivalent to the loss but which will itself be exhausted at the time of the notional death …   Law dictionary

  • М — Магистраль [turnpike] Мажоритарный акционер (Majority shareholder) Мажоритарная доля собственности (majority interest) Мажоритарный контроль (majority control) …   Экономико-математический словарь

  • List of Statutory Instruments of the United Kingdom, 1990 — NOTOC This is a complete list of all 1646 Statutory Instruments published in the United Kingdom in the year 1990.1 100* Caseins and Caseinates (Scotland) Amendment Regulations 1990 S.I. 1990/1 * Personal Community Charge (Relief) (England)… …   Wikipedia

  • Marginal propensity to consume — In economics, the marginal propensity to consume (MPC) is an empirical metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) occurs with an increase in disposable income (income… …   Wikipedia

  • Dragon Quest IX: Sentinels of the Starry Skies — North American boxart Developer(s) Level 5 Publisher(s) …   Wikipedia

  • Fairway Solitaire — Infobox VG title = Fairway Solitaire developer = Grey Alien Games publisher = Big Fish Games designer = engine = Director released = December 2007 genre = Card modes = Single player ratings = ESRB: Everyone (E) platforms = Windows, Mac OS X media …   Wikipedia

  • Maximum wage — A maximum wage, also often called a wage ceiling, is a legal limit on how much income an individual can earn.[1] This is a related economic concept that is complementary to the minimum wage used currently by some states to enforce minimum… …   Wikipedia

  • Ogden tables — are a set of statistical tables and other information for use in court cases in the UK. Their purpose is to make it easier to calculate future losses in personal injury and fatal accident cases. The tables take into account life expectancy and… …   Wikipedia

  • DuPont analysis — (also known as the DuPont identity, DuPont equation, DuPont Model or the DuPont method) is an expression which breaks ROE (Return On Equity) into three parts. The name comes from the DuPont Corporation that started using this formula in the 1920s …   Wikipedia

  • economic stabilizer — Any of the institutions and practices in an economy that serve to reduce fluctuations in the business cycle through offsetting effects on the amounts of income available for spending (disposable income). The progressive income tax, unemployment… …   Universalium

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.