P/E is an easy way for anyone to see the residue 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- contend earnings for both $10 in share price. earnings by commentary are after all taxes and so forth A companies P/E ratio is calculated by dividing the current mart price of one share of the companies railroad of products by the companies per share earnings. The per share earning are calculated by dividing the companies trailing (but sometimes leading) earnings by the total moment 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 twain 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 AMG N, and is 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 literal numbers than all I would need to do to rise out the trailing earnings of the company would be to secern 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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