This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). We’ll show how you can use Record plc’s (LON:REC) P/E ratio to inform your assessment of the investment opportunity. Record has a price to earnings ratio of 10.72, based on the last twelve months. That is equivalent to an earnings yield of about 9.3%.
How Do I Calculate A Price To Earnings Ratio?
The formula for P/E is:
Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Or for Record:
P/E of 10.72 = £0.313 ÷ £0.029 (Based on the trailing twelve months to September 2019.)
(Note: the above calculation results may not be precise due to rounding.)
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