Answers:

Sure. P/E is call the Price-to-Earnings ratio. In other words, it is the price of a stock, divided by its Earnings Per Share (or EPS). EPS is calcuated by taking a company’s Net Income and dividing it by the total number of shares outstanding (all the shares owned by investors in the company).

Stock Price / EPS = P/E

The explanation why they’re meaningful within investing is that they minister to illustrate how expensive an investment is. Investors compare P/E ratio across different companies contained by proclaim to reputation them by how expensive they are. If you enjoy a company beside a P/E of 32 and another beside a P/E of 13, afterwards one mode you could dream up roughly speaking is this: it would cart 32 years to verbs your income surrounded by the first company assuming that it stopped growing and returned its current income forever. Whereas you would bring your investment returned to you in 13 years for the second stock. Now, in truth, investors don’t in fact recieve the yield from stocks (for the most part), so this is a rational excercise, but I ruminate you return with the point.

Oh, and EPS is prominent because you can’t figure P/E minus it. p/e is profits to yield ratio.

EPS is earn per share.

if you own 100 shares of a stock and the stock rises, you earn X amount of cents per share, unless the share rose surrounded by dollars and cents. P/E is the price per share divided by the income per share. It give you an thought how expensive a stock is relative to the amount it is earn per share. The average of the S&P 500 is somewhere around 18. The capacity for 90% of the stocks that earn money is roughly speaking 5 to 35. Companies that are expected to grow thoroughly promptly largely command highly developed P/Es. For example G00GLE and Apple. Companies that might see a downturn contained by yield might hold a incredibly low P/E ratio. For example grease companies.

EPS is the total money the company earn divided by the number of shares outstanding. P/E or PRICE EARNING = CURRENT MARKET PRICE DIVIDED BY EPS, WHICH HELPS TO ASSESS IF THE CURRENT MARKET PRICE IS HIGH OR LOW COMPARING WITH THE SIMILAR TYPE OF COMPANIES. THIS RATIO WILL CHANGE DAILY IN ACCORDANCE WITH THE CHANGE OF PRICE.

EPS or EARNING PER SHARE = NET PROFIT DIVIDED BY THE NUMBER OF SHARES, WHICH IS AN IMPORTANT ELEMENT TO ASSESS P/E. THE EPS IS CONSTANT ONE TILL FRESH NET PROFIT IS ANNOUNCED FOR THE CURRENT PERIOD.