What is PE : Price Earning Ratio ?

PE Ratio is the main and popular tool to judge and measure the risk associated with a share . PE is a valuation tool of a company’s current share price to its Earning Per Share (EPS).

PE is calculated through Dividing “Market value per share” by “EPS”.

For example: If MICEMENT is currently trading at Tk.100 per share and The EPS of the company is Tk. 5 over the last 12 months, then the P/E ratio for the stock would be
100 ÷ 5 = 20.



You may have interest about the followings
Importance of PE : Price Earning Rratio in Buying Decision
What is Authorized Capital ?
What is Public Limited Company ?
What is Profit ?
What is Dividend ?