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).

The P/E ratio helps determine a stock's market value relative to its earnings ... you divide the stock's current price by its earnings per share (EPS): P/E Ratio = Stock Price ÷ EPS.

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

Investors use metrics like the P/E ratio to assess whether stocks are ... your shares will need to go up to maintain the same market cap. Share buybacks are generally cheered by shareholders ...

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.