The forward P/E ratio is simple to compute. Using the P/E ratio formula -- stock price divided by earnings per share -- the forward P/E ratio substitutes EPS from the trailing 12 months with the ...

Here's the theory behind the formula: When a call optionon a stock expires, its value is either zero (if the stock price is less than the exercise price) or the difference between the stock price ...

Limitations to the P/E Ratio The first part of the P/E equation or price is straightforward because the current market price of a stock is easily obtained, but determining an appropriate earnings ...

In cell B7, input the formula "=B6/B5" to render the EPS ratio. Earnings per share (EPS) is an important profitability measure used in relating a stock's price to a company's actual earnings.