Chapter 2: Financial Markets: Part 2

1) Take the market cap, which is equal to the number of shares outstanding times the current price of the stock and divide it by current year earnings. From the example above: PE ratio = $147,175 / $15,000 = 9.81. 2) Take the price per share and divide it by current year earnings per share: PE ratio = $14.72 / $1.50 = 9.81. We can now do some ... ................
................