
P/E Ratio Meaning The Price/Earnings Ratio (P/E Ratio) is a ratio used by investors to help evaluate how cheap or expensive a company’s stock is. P/E ratios are used by investors and analysts to determine the relative value of a company's shares in an apples-to-apples comparison. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time. Price Earnings Ratio Formula The P/E Ratio is calculated by dividing a stock’s price by its earnings per share. As an example, a stock with a price of $90…
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