How to Compute the Price-Earnings Ratio
- 1). Select the appropriate market value and earnings per share figures. To calculate trailing price-earnings ratio, use figures from the previous four quarters. For rolling price-earnings ratio, use figures from the previous two quarters and the projected figures for the upcoming two quarters. For the forward price-earnings ratio, use the projected figures for the coming four quarters.
- 2). Write down the market value for the stock for the selected period.
- 3). Write down the earnings of the stock for that same period.
- 4). Divide the market value by the earnings per share. This will give you the price-earnings ratio.