Price to Earnings Ratio Worksheet
Name ___________________________
Date ____________________
Price to Earnings Ratio Worksheet
The Price to Earnings ratio is thought to be a good indicator when valuing a company. It is a simple reflection of the price of the company's stock divided by the amount of money that the company has earned.
P/E ratio =
It is commonly accepted that the lower the P/E ratio the better value on the stock for investors. A high P/E ratio is seen as an overpriced stock since you are paying more than the company is making.
1. Calculate the P/E ratio for the Hanna Banana Company. Their earning report indicates earn $7.84 a share. The current stock price is trading at $9.28.
2. The current P/E ratio from Apple Corporation is at 13.77. If the current stock price is $565.25 per share, what is Apple's current earnings per share?
3. You are evaluating the following three companies stocks:
Megatron Corporation Stock Price = $52.14 Earnings Per Share = $28.93
Xsail Corporation Stock Price = $8.69 Earnings Per Share = $7.82
iMoved Corporation Stock Price = $9.68 Earnings Per Share = $11.28 Traditionally, which stock has the best value?
? This stock market worksheet is from teach-
Name ___________________________
Answer Key
Date ____________________
1. 1.25
2. $41.05 per share
3. iMoved Corporation (Lowest P/E ratio)
? This stock market worksheet is from teach-
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