Formula

PER=Stock Price/Earning Per Share

Description

PER( Price Earning Ratio) is the formula that used to measure whether this stock is in reasonable price or not.If PER is high, it mean that this share is expensive.If PER is low, it mean that this share is cheap and undervalued.If a stock has PER value 10, it mean that if you invest in this share, you will need to use 10 year to earn back your capital.

Example

If Stock A closed at 37 sen and its EarningPerShare is 3.7.
PER=Price/EarningPerShare=37/3.7=10.
You will need to take 10 year to earn back your capital.

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