P/E Ratio

fullname: price to earnings (P/E) ratio

formula

(1) $\begin{align*}PE = \frac{\text{current share price}}{\text{earnings per share (EPS)}}\end{align*}$

example

a company whose shares are trading at $1 and has earnings per share of 10 cents has a PE ratio of 10.
100 (cents) ÷ 10 (cents) = 10

usage

attention
it depends on EPS which can be manipulated