What Is the PE Ratio? How Is It Calculated and Why

question 1

Essay

What is the PE ratio? How is it calculated and why is it that the PE ratio for a privately held company often cannot be calculated?

---

Definitions:

Internality

The belief in one's ability to control events and outcomes in their own life, often associated with a proactive mindset.

Externality

A term in economics where a cost or benefit that affects a party who did not choose to incur that cost or benefit.

External Attribution

The process of attributing the cause of one's own or others' behavior to external factors, rather than to internal personality traits.

Causal Attribution

The process of determining the underlying cause or reason behind an event or behavior, attributing it to internal dispositions or external situations.