Price to Earnings (P/E) Ratio and Earnings Per Share (EPS) Explained

This video provides a basic introduction into the price to earnings ratio and earnings per share value. It explains how to calculate the P/E ratio using two simple formulas and how to calculate the EPS value using the earnings of a company minus any preferred dividends divided by the shares outstanding. The P/E ratio can be calculated by dividing the price of the stock by the EPS value. It can also be calculated by dividing the market capitalization of the company by the total earnings.

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Return on Assets (ROA) and Return on Equity (ROE):
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