Definition
Price divided by the earnings a company or index is expected to make over a future period, rather than by earnings already reported.
The "blended forward 12-month" variant used on DollarLiquidity.com looks exactly twelve months ahead, drawing on the next two fiscal years in proportion to how much of that window falls in each, so the number does not jump when a company rolls its fiscal year. At index level it is computed as a ratio of aggregates — total expected earnings over total market value, weighted the way the index weights its members — not as an average of member multiples, which would let one small expensive name distort the whole. Forward multiples move for two very different reasons: the price changed, or the estimates did. A multiple that fell because estimates were cut is not the same event as one that fell because the market sold off, and only the first is a warning. Note that forward P/E is tracked at /valuation as an adjacent module: it is not one of the DLI liquidity indicators and never enters the liquidity score.