A Price-Earnings Ratio is just the price of the company in the market per share, divided by it’s earnings for the year. In this video, I explain what Price-Earnings Ratios are, and why they are critical for you to understand when evaluating a company.

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5 COMMENTS

  1. Hi thanks for a great video as always,
    If a company earns $10 per share and if assume the stock's price $100, then
    PE = $100 / $10 = 10 right ??
    and from your other video I learned that "Payback time", lets call it PT,
    PT = stock price / EPS, then
    PT = $100 / $10 = 10 ??
    From above calculations can I assume PT = PE ?
    Or Is there a difference between PE, and PT (Payback Time)

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