How to construct a forward-looking P/E ratio

When using price-to-earnings ratio to evaluate the long-term potential of a company, remember to also factor in a forward-looking P/E ratio

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Continued from: Evaluating the long-term potential of a company

Constructing a forward-looking P/E ratio involves estimating a company’s future earnings and dividing it by the current stock price.

Here are the steps to calculate a forward-looking P/E ratio:

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Evaluating the long-term potential of a company

You can use revenue growth, earnings growth, dividend yield or price-to-earnings ratio to evaluate the long-term potential of any company

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In this blog post, we discuss the basics of how revenue growth, earnings growth, dividend yield and price-to-earnings ratio can be used to evaluate the long-term potential of a company

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