Cash adjusted price earnings multiple (CAPE)

Cash adjusted price/earnings multiple when the conventional Price/Earnings multiple of a company is adjusted. These companies are usually sitting on huge piles of cash reserves. It is adjusted so that the liquid portion of its stock is worth exactly that amount. This is done by taking the current price of the company's stock and the cash per share is subtracted from it. Then, the result will be divided by its four trailing quarters EPS. The result is an adjusted Price/Earnings multiple.

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