Learn how to calculate earnings per share (EPS) and why it is an important gauge in determining a stock’s value and the profitability of a company.

It shows what the market is willing to pay for a stock based on its past or future earnings. The P/E ratio is calculated by dividing the market value price per share by the company’s earnings ...

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 ...

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 ...

The price-to-earnings ratio is one of the ... is calculated with the following mathematical formula: P/E Ratio=Price Per ShareEarnings Per Share\begin{aligned} \text{P/E Ratio} ...

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 ...

Compared to the aggregate P/E ratio of the 27.1 in the Pharmaceuticals industry, Johnson & Johnson Inc. has a lower P/E ratio ...