Thursday, 2 November 2017

Financial Ratios

Financial Ratios

Price to Earning (P/E) Ratio

The Price to Earnings ratio is perhaps the most popular financial ratio. Everybody likes to check
the P/E of a stock. Because of the popularity the P/E ratio enjoys, it is often considered the ‘financial
ratio superstar’.

The P/E of a stock is calculated by dividing the current stock price by the Earning Per share
(EPS). Before we proceed further to understand the PE ratio, let us understand what “Earnings
per Share” (EPS) stands for.EPS measures the profitability of a company on a per share basis.

- thanks to zerodha

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