To calculate a company's P/E ratio, divide the price of one share of that company's stock by the earnings per share (often abbreviated EPS) of that company’s stock over a period of 12 months.

ratio. To calculate earnings per share, divide a company’s annual or quarterly profit by the number of shares of stock it has outstanding. Note: If a company has both preferred and common ...

The P/E ratio is calculated with the following mathematical formula: A company whose stock trades at $50 per share and has earnings of $5 per share has a P/E ratio of 10. There are several ...

You can also calculate the dividend payout ratio by taking the dividend per share and dividing by the earnings per share, or EPS: Dividend per share / earnings per share = dividend payout ratio $4 ...

So, what is the price-earnings ratio, or P/E ... is overvalued or undervalued. The formula for calculating P/E is fairly simple: P/E = market value per share/earnings per share You'll have ...

ratio is a popular valuation metric that indicates a company’s future growth potential by comparing its current market price to its earnings per share (EPS). Using the P/E ratio to evaluate a ...

Reviewed by JeFreda R. Brown The financial services sector is one of the most important drivers of the U.S. economy. The sector comes with different risks, which tend to change based on individual sub ...