A dynamic financial ratio calculated by dividing the Price-to-Earnings ratio (PER) by the growth rate of earnings per share. It is a ratio of ratios, where the numerator compares how many times the price of a stock exceeds the earnings per share, and the denominator is the historical growth rate of that earnings. Therefore, it is another possible indicator used to estimate whether a company is expensive or cheap and to compare between similar companies in the same sector. Normally, a high Price-to-Earnings ratio indicates high earnings growth, but this is not always the case; the Price-to-Earnings ratio allows to determine whether there is a direct relationship between the two data or not.
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