The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We’ll look at Varroc Engineering Limited’s (NSE:VARROC) P/E ratio and reflect on what it tells us about the company’s share price. Looking at earnings over the last twelve months, Varroc Engineering has a P/E ratio of 17.92. That is equivalent to an earnings yield of about 5.6%.
How Do You Calculate Varroc Engineering’s P/E Ratio?
The formula for P/E is:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Varroc Engineering:
P/E of 17.92 = ₹588.85 ÷ ₹32.86 (Based on the year to December 2018.)
Is A High Price-to-Earnings Ratio Good?
The higher the P/E