Price to Earning ratio of a stock is often called "earnings multiple" or simply "P/E", or even "PE".
It is a measure of how expensive a stock is. It compares the current market price of a share with earnings per share, to evaluate the income possibility of a stock.
P/E ratio= Price per Share\Earnings per Share
“Price per Share” is a market price of a single share.
“Earnings per Share” is the net income of the company, usually for the last 12 month period, (also can be projected value, i.e. for the next 12 month) divided by number of shares. It is a net income of a single share for the last 12 month period.
The value of PE ratio should be the same whether the calculation is done on the whole company basis or on a per share basis.
