Glossary of Analyst Research Report Terms

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Preferred Stock
Capital stock with a claim on company earnings and assets that takes precedence over the claims of common stock in the event of the company's liquidation. Preferred stock often pays a regular dividend, which is also paid prior to any dividend payments to common stockholders. Preferred stock usually does not carry voting rights.
Pretax Income Earnings before income tax is subtracted.
Price/Earnings Ratio (P/E Ratio) A common measure for identifying undervalued and overvalued stock. It uses the relationship between a company's earnings and share price to value a company's stock. The P/E ratio is calculated by dividing the current market price per share by the earnings per share. A stock's P/E ratio gives you a sense of what you are paying for a stock in relation to its earning power (e.g., a stock with a P/E of 20 is trading at 20 times its earnings). If a company's market price is $40 and the earnings per share is $4, the P/E ratio for the company is 10.
Price to Book Ratio A ratio calculated by dividing a company's total market capitalization by its book value.
Pricing Pressure Condition resulting when, in response to the competitive nature of the market, companies must reduce the prices of their products or services. This can reduce earnings.
Prime Rate In theory, the interest rate banks charge their best and biggest customers for short-term loans. In practice, banks sometimes vary the rate they offer, depending on other factors such as the customer's creditworthiness.
Pro Forma (PF) Financial Statements Hypothetical financial statements based on a projected or recently completed transaction, such as a merger.
Publicly Traded Company A company whose securities can be bought and sold by the general public.