Practice - Price Earning Ratio (P/E Ratio)
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Practice Questions
Test your understanding with targeted questions
What is the formula for calculating the P/E Ratio?
💡 Hint: Think about how we relate market price to earnings.
If a company's market price per share is ₹150 and its EPS is ₹10, what is the P/E Ratio?
💡 Hint: Use the formula: Price divided by earnings.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What does a high P/E Ratio generally indicate?
💡 Hint: Think about the relationship between stock price and earnings expectations.
True or False: A negative P/E Ratio indicates the company is making a profit.
💡 Hint: Consider what happens to P/E when earnings are negative.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A company has a current market price of ₹900 per share and EPS of ₹75. Another competitor has a market price of ₹600 with an EPS of ₹30. What can you infer from the P/E Ratios of both companies?
💡 Hint: Calculate both ratios and compare.
Critique the reliance on P/E Ratios in the decision-making process for investments in fluctuating markets.
💡 Hint: Reflect on these factors' influence when evaluating stock value.
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