Business – 10.2 Analysis of published accounts – Investment ratios | e-Consult
10.2 Analysis of published accounts – Investment ratios (1 questions)
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The P/E ratio is calculated as:
P/E = Share Price ÷ EPS
£45 ÷ £3.00 = 15
A P/E of 15 means investors are willing to pay £15 for every £1 of earnings. Compared with the typical market range (often 12‑20), this suggests moderate expectations – the market anticipates earnings growth that is neither exceptionally high nor low.