The Earnings Per Share (EPS) & Price-to-Earnings Ratio (P/E Ratio): Definitions. Formulas. Examples.
It's fairly unlike that you haven't come across terms such as "earnings per share" (EPS) or P/E ratio if you at least occasionally tune into financial media outlets.
But what are these earnings per share all about, why should you care about the EPS metric?
What about the P/E ratio, why do many investors (value investors, for example) swear by it?
Everything you need to know about the EPS as well as P/E ratio has been explained in this video, from the definitions of the terms to their respective formulas and, of course, examples of contexts where the earnings per share or P/E ratio can be put to good use.
As explained in this video, understanding the two terms is fairly straightforward.
Also, I have provided formulas structured so as to make them easy to remember. In my view, meaningfully understanding a concept is far more important than sounding smart during dinner conversations.
This is especially true when it comes to metrics such as the earnings per share or P/E ratio. Truly "getting" them can literally make or break your career as an investor, so why not allocate a minute (literally) of your time to watch this video explanation and learn what the two are all about in a way that ensures the information actually sticks?
