Question:

Is a price to earning ratio the price vs. the stocks earnings or the companies sales earnings? (P/E) ?

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P/E = price vs. companies sales earnings? or Price vs. the companies stocks earnings ?

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  1. P/E ratio is defined as" Market value of the share / Earnings per share"

    Where earnings per share is the profit of the company after tax and any preference dividends divided by the number of shares of the company


  2. P/E = Market share price / earning per share

    P/E it's abt investor expectation to  the company,even higher the P/E ratio mean even high expectation investor to this company,investor willing to pay high price to buy the shares ,when they think this company will growing or have good business operation at the future period.

  3. price of stock/earnings

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