Private Equity (P/E) Ratio 

The Private Equity (P/E) Ratio is a valuation multiple that compares a company’s market value to its earnings. While widely used in public markets, private equity firms also use this ratio to assess the attractiveness of private investments. 

Formula: 

 P/E Ratio = Market Value per Share ÷ Earnings per Share (EPS) 

A high P/E ratio suggests growth expectations, while a lower ratio may indicate undervaluation or limited growth prospects. In private markets, due to the absence of real-time pricing, P/E ratios are typically derived from valuation estimates and adjusted earnings.