2006-10-23 18:21:29 · 4 answers · asked by RAVI S 1 in Business & Finance ➔ Investing
The "mean" of the P/E ratio is just the "average" of the P/E ratio.
You can calculate the P/E ratio by dividing the current stock price by the EPS (earnings per share) of 12 months.
To calculate the average, add all the prices together and divide it by the number of the prices that you took, i.e. 5 days, 5 P/E ratios of a certain stock (20, 21, 21, 22, 20). So, you add those ratios together (20+21+21+22+20) / 5 to find the MEAN of the P/E ratio.
Hope this help!
2006-10-23 19:51:35 · answer #1 · answered by c00kies 5 · 0⤊ 0⤋
P/E means the ratio of a stock's price to its earnings. Supposedly, some people think that this is a pretty good way to know which stocks are cheap or expensive at their current valuations. Of course, the market doesn't care if you're right or wrong and you could be stuck holding worthless shares until the company just finally tanks. There are many many many ways to determine the next direction in price of a stock and P/E is just one of those ways.
2006-10-23 18:34:44 · answer #2 · answered by forex 3 · 0⤊ 0⤋
A P/E Ratio is a Price to Earnings Ratio. It is calculated by taking the per share price and dividing it by the earnings per share. This metric is one commonly used to analyze stock performance.
Stock analyst publications like Standards and Poors or Value Line or even Yahoo Finance provide this information.
If you are new to investing, you might want to check out http://www.betterinvesting.org/.
2006-10-23 18:38:15 · answer #3 · answered by Marcella G 2 · 0⤊ 0⤋
P/E Ratio = Market value per share divided by Earnings per share
In simple term, this ratio measures the number of years that your capital outlay will, at the prevailing level of earnings, be
recouped either in the form of dividends or capital growth by virtue of retained profits.
2006-10-23 19:32:29 · answer #4 · answered by FC 1 · 0⤊ 0⤋