P/E is an easy way for anyone to see the proportion of a associations dower price to its per- care dough. For example, a P/E ratio of 10 means that the company has $1 of annual, per- overlap earnings for both $10 in share price. lolly by commentary are after all taxes etcetera A companies P/E ratio is calculated by dividing the current mart price of one share of the companies tone of products by the companies per share earnings. The per share earning are calculated by dividing the companies tracking (but sometimes leading) earnings by the total summate of stocks. So for example, if the company had made $50 million in the past 12 months, and had 10 million stocks, their per share earning would be $5. Â Â Â Â Â Â Â Â To back up to prove my understanding of the P/E ratio I will do two examples, one from the Business component of the November 4th Toronto Star. Â Â Â Â Â Â Â Â For November 4ths example I chose the stock Amgen, which has the ID AMGN, and i s on the Nasdaq market.
The PE for this stock is listed at 55, and the closing price per share was 58.54. If these are both real numbers than all I would need to do to reveal out the trailing earnings of the company would be to appoint the Price of the share by the PE. This would be 58.54/55, and the equation shows that the trailing earnings per share is $1.00. If you indirect request to get a full essay, order it on our website:
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