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Price per share / Earnings per share = Price-Earnings Ratio
Price-Earnings Ratio shows how much the investors are willing to pay per earnings for the company. For example, if the P/E Ratio is 15 suggests that the investors of a stock is willing to pay $15 per $1 of earnings of the company may produce over the year.
Dividing a stock’s current price per share by the issuing company’s earnings per share results in the price-earnings ratio. Price-earnings ratio = price per share / earnings per share. The price per share is how much each share of stock costs to purchase. The earnings per share is how a company can see if they are profitable now and in the future.

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