Price Earnings Multiple Calcultor

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The price/earnings ratio (often shortened to the P/E ratio or the PER) is the ratio of a company's stock price to the company's earnings per share. The ratio is used in valuing companies.

For example, if the market value of stocks equals jumi,000,000 and the net income equals - 0,000, the price/earnings ratio is 10

1,000,000 / 100,000

The Meaning is: an investor who buys the company for 1 million dollars, should wait for 10 years till he earns his money

The reason is - the company earns only 0,000 per year.

A lower price/earnings ratio is better

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