The article may contain affiliate links from partners. The words, opinions, and reviews are our own. Learn how we make money to support our financial wellness mission.

A company’s P/E ratio is a way of gauging whether the stock price is high or low compared to the past or to other companies. The ratio is calculated by dividing the current stock price by the current earnings per share. Earnings per share are calculated by dividing the earnings for the past 12 months by the number of common shares outstanding.

Main Menu