What is a Price-Earnings Ratio - P/E Ratio? : An Entrepreneur's Journey pt 53

The price-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings. The P/E ratio can be calculated as: Market Value per Share / Earnings per Share.  The PE Ratio can be found when searching most stock tickers:

The PE ratio is important to understand when investing in stocks because it tells you you expensive the stock is relative to the earning power of the company.  If a stock, like above, has a price per earning of 114, this means that the price of the stock is trading at 114x the current yearly earnings.  I explain further ....

You can see all of my videos on PushYourRank's YouTube Channel as soon as I post them.  I repost the videos here to give you more context into what I was thinking and maybe what I was going through that day that might be relevant.  Again my goal with these videos is to document what I have learned from entrepreneurship.  Follow me on twitter @NicholasCoriano