The PE ratio is calculated by dividing the price of a stock or an index by the earnings per share , or EPS, (net profit divided by the number of common shares outstanding). For example, if a stock is trading at ₹50 and its earnings per share is ₹10, then the PE ratio is 50/10=5.
The Price-to-Earnings ratio or PE ratio is one of the most popular valuation metrics used in the markets to analyse a stock and its valuation trajectory.
by Callum Thomas, Topdown ChartsThe Chart Storm is a weekly selection of 10 charts which I hand pick from around the web (plus some of my own charts), and then post on Twitter.