Price Earning / PE Ratio - the thin line

PE ratio is a very common key financial ratio used in stock analysis. However, one need to be cautious of the value itself. Sometimes, forward PE ratio is reported rather than the current PE ratio. PE ratio is simply EPS/NTA, whereas forward PE is projected EPS / NTA , where the projected EPS is not something that has yet to happen. Forward PE is always used to give the investor the impression that the PE will be cheaper in future than it is currently.