What is EPS (Earning per Share) ?What is PE?

Eps stands for Earning Per Share.

EPS= Net Profit / Number of Shares in Issue.

Means Profit for a single ordinary share of particular company.

The EPS is profits (after tax and everything else) divided by the number of shares in issue. It is the amount of the company’s profits that belong to a single ordinary share. Companies are required to publish the statutory (also called “basic”) EPS but there are a number of adjusted EPS numbers which can be more useful to analysts


What is PE?What we can determined by PE ration of company's Share?

PE=Share Price/EPS

It is abbreviated form of The price/earnings ratio,

More often if PE ratio is low ,it indicate investors has less interest of lack of confidence on company or Market may have ignored or overlooked that stock.

Good Investors mostly accumulate fundamental stocks at very low PE, The buy these kind of stack before market discover them.

High PE mostly indicate market has put confidence on this stock.Investor might have foreseen a good future for the stock.

In Valuation ratio PE ratio is most exorbitantly used & also it is very simple to calculate then others.