Think of it this way: The market price of a stock tells you ... and the company generates $4 per share in annual earnings, the P/E ratio of the company’s stock would be 25 (100 / 4).

Find out more about the forward price to earnings ratio and how to calculate the forward price to earnings ratios of companies in Microsoft Excel.

The price-to-earnings (P/E) ratio helps investors evaluate stock value by comparing share price to earnings per share. A high ...

General Motors is valued well below its earnings potential, highlighted by a P/E ratio ... overall stock market drops, even high-quality companies with strong fundamentals see share prices fall.