The price-to-earnings ratio or P/E is one of the most widely-used stock analysis tools used by investors and analysts for determining stock valuation. read more
Fortunately, with the aid of a simple hand-held financial calculator, there is a simple mathematical approach to finding rational P/E and PEG ratios. Earnings Yield The best way to understand the significance of the P/E ratio is to turn it upside down. read more
A P/E ratio of 40 is really high, a P/E ratio of 7 is really low, and a ratio of 14 represents the average over modern history. Armed with this information, you can look up the current P/E ratio of the stock market and figure out where things are relative to historical times. read more