Price to Earnings Less Cash

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Definition

Price to earnings (P/E) ratio, less cash.

Let's say a company has significant cash. By purchasing a stake, you are purchasing two components, the company's business operational assets and its cash. Subtracting cash per share from P/E answers the question, "What is the adjusted P/E ratio of the operational assets without the cash?"

For more information on evaluating valuation multiples similar to this, please see our original white paper research : Making Sense Of Valuation Multiples.

Formula

YCharts calculates this formula as:

P/E less cash: EPS of a stock - cash per share