The ratio is the ratio of market price to earnings per share of a common stock.

So it is also known as stock price earnings ratio or market profit ratio.

The formula is:

Earnings per share = common stock market price / common stock earnings per share per year

The molecules in the above formula refer to the current market price per share, and the denominator can be used for profit in the latest year, and it can also be used to predict profits in the next year or a few years.

This ratio is one of the most basic and important indicators to estimate the value of common stock.

It is generally believed that this ratio is maintained at 10-20.

After the novel, the stock price is low, the risk is small, and it is worth buying.

But according to the actual situation of stock market, most of the stocks with large earnings are hot stocks, and the small ones may be unpopular stocks, and buying is not necessarily advantageous.