PE Ratio Explained Full - Devrhoid Davis

Devrhoid Davis
Devrhoid Davis
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Published 2020-05-25
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PE Ratio Fully Explained.

The Price to Earnings Ratio, or PE Ratio for short, is a term that you come across fairly often when reading about a stock. It is a relative valuation metric that investors use to gauge whether a stock is over-valued or undervalued. We will talk about this in a little more detail later in the video so be sure to stick around to the end.
The PE ratio is calculated by taking dividing a company’s stock price by the company’s earnings per share or its EPS. The EPS can be found on the company’s income statement from the Audited Financial Statements or the company’s 10K. If it is not there then you can calculate it by taking the company’s net income and dividing it by the amount of shares in issue for that period.


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