Algorithm and Multiple

noun

• A precise rule (or set of rules) specifying how to solve some problem.
  • synonyms: algorithmic rule, algorithmic program

• (n.) The art of calculating by nine figures and zero.
• (n.) The art of calculating with any species of notation; as, the algorithms of fractions, proportions, surds, etc.

Algorithm is a complex mathematical model. In credit scoring, it is used to compare data in millions of credit reports and predict a person's likelihood to repay debts.

noun

• The product of a quantity by an integer.
  • usage: "36 is a multiple of 9"

adjective

• Having or involving or consisting of more than one part or entity or individual.
  • usage: "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple achievements in public life"; "her multiple personalities"; "a pineapple is a multiple fruit"

• (n.) A quantity containing another quantity a number of times without a remainder.
• (a.) Containing more than once or more than one; consisting of more than one; manifold; repeated many times; having several or many, parts.

Multiple is a stock's multiple is its price-to-earnings ratio (P/E). It's figured by dividing the market price of the stock by its earnings-either the actual earnings for the past four quarters (called a trailing P/E) or actual figures for the past two quarters plus an analyst's projection for the next two (called a forward P/E). Investors use the multiple as a way to assess whether the price they are paying for the stock is justified by its earnings potential. The higher the multiple they are willing to accept, the higher their expectations for the stock. What's considered high, however, has changed dramatically in recent years as Internet stocks with low earnings (and very high multiples) or no earnings (and therefore no way to compute a multiple) have commanded high prices.