The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We’ll look at Huali University Group Limited’s (HKG:1756) P/E ratio and reflect on what it tells us about the company’s share price. Huali University Group has a price to earnings ratio of 6.28, based on the last twelve months. That corresponds to an earnings yield of approximately 15.9%.
How Do You Calculate A P/E Ratio?
The formula for P/E is:
Price to Earnings Ratio = Share Price (in reporting currency) ÷ Earnings per Share (EPS)
Or for Huali University Group:
P/E of 6.28 = CN¥2.692 ÷ CN¥0.429 (Based on the trailing twelve months to February 2020.)
(Note: the above calculation uses the share