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Price-Earnings Ratio Abbreviated PE Ratio. Also known as the Stock’s Multiple. Calculated by dividing price by EPS. PE represents the amount that investors are willing to pay for each dollar of earnings. The PE value will fluctuate. The higher the PE ratio, the riskier and more volatile the...

Previous Day’s Close The previous trading day’s last reported trade. The Previous Day’s Close on the NASDAQ web site is updated at 3:30 A.M.

Pre-tax Profit on Sales Also known as Profit Margin; Profitability. Calculated by dividing the Pre-tax Income by Net Sales: (Net Income / (1 - Tax Rate)) /Revenues. This measures the effectiveness of management in controlling expenses and is a useful measure of overall operational efficiency...

Pre-tax Income Also may be called Net Income Before Taxes, Income Before Profit, or Income Before Taxes. This is the profit made by the company before paying taxes. It is calculated by dividing the net income by one minus the tax rate: Net Income / (1 - tax rate as a decimal)

Present Value The value today of a future payment or stream of payments, discounted at some appropriate interest rate.

Premium Bond A bond that is valued at more than its face amount.

Premium (1) The amount of cash that an option buyer pays to an option seller. (2) The difference between the higher price paid for a security and the security’s face amount at issue.

Preferred Stock A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders. Preferred shareholders have a claim, prior to common stockholders, on earnings and assets in the event of liquidation. Preferred stock does not usually have...

Preferred Dividends These dividends are paid at a specified rate to shareholders who have purchased preferred shares. Should the company be in financial difficulty, the preferred shareholders would receive their due before the Common Shareholders. Preferred dividends are used as part of the...

Potential Total Return Suggests the potential compounded return on your investment over 5 years, based on expected growth of EPS. It supposes that you bought the stock at the current price, earned the average dividend yield, and sold at the forecast high price to achieve the potential annual...

Potential Average Dividend Yield Suggests the potential percentage dividend payments, compounded yearly over the next 5 years. Combined with price appreciation, Yield makes up the possible total return percentage.

Potential Dilution Any outstanding options, warrants, or convertible debentures that are converted to common shares will dilute the value of those shares.

Position The amount of a security either owned (a Long position) or owed (a Short position) by an individual or by a dealer. Dealers take long positions in specific securities to maintain inventories and thereby facilitate trading.

Portfolio Manager Also known as Fund Manager. The entity responsible for investing a mutual fund’s assets, implementing its investment strategy and managing day-to-day portfolio trading.

Pink Sheets A daily publication compiled by the National Quotation Bureau and containing inter-dealer wholesale Quotations for over-the-counter stocks.

Personal Income An individual’s total earnings derived from wages, passive business enterprises and investments.

Percent Retained to Common Equity Also known as Plowback Ratio. A Value Line measurement defined as net profit minus Common and Preferred Dividends, divided by Common Equity, expressed as a percentage.

Percent Payout The percentage of the company’s profits that are paid out in dividends to shareholders. Calculated by dividing 100 times the dividends per share by the EPS: Dividends per Share * 100 / EPS.

PE ratio to EPS growth Calculated by dividing a stock’s Price-Earnings Ratio by its Earnings Per Share growth rate. Provides a comparison between the value that the market has put on a company’s expected earnings and what the company has actually earned in the past.

Payout Ratio The percentage of earnings paid out in dividends, calculated by dividing dividends per share by Earnings Per Share.