PE RATIO

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 WHAT IS PE RATIO IN STOCK MARKET

The PE ratio is commonly used for stock selection, whether it is suitable to buy or not. The PE ratio as certain the value of a company based on the current stock value per share for every rupee of its future earning. PE ratio helps to understand company's worth presently and future growth anticipated based on how its share prices are relative to its earning per share.



It is a important tool for the investors for stock evaluation. If a PE ratio is high, it means that the stock is overvalued and take the decision not to buy that particular stock. If PE ratio is low, investors takes the decision to buy it due to it cheap price.

PE CALCULATOR

To calculate P/E ratio, divide the present stock value by the earning per share (EPS)

P/E ratio = Market value per share/Earning per share   

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