To calculate a company's P/E ratio, divide the price of one share of that company's stock by the earnings per share (often abbreviated EPS) of that company’s stock over a period of 12 months.

EPS is a commonly used measure of a company’s profitability, and it is used in the calculation of other popular valuation metrics like the price-to-earnings (P/E) ratio. To calculate earnings ...

Getty Images / juststock The forward price-to-earnings ratio (P/E) is a valuation metric that measures and compares a company's earnings using expected earnings per share and the current stock price.