Today the common stock of Gresham Technology closed at $24.6024.60 per share, down $0.350.35 from yesterday. If the company has 4.64.6 million shares outstanding and annual earnings of $11.211.2 million, what is its P/E ratio today? What was its P/E ratio yesterday?

10.10 is its P/E ratio today

10.25 was its P/E ratio yesterday

Solution:

The ratio of a firm's share price to its earnings per share is the measure of the profit-earnings, also known as the P / E ratio, P / E or PER.

Yesterdays price: 24.60 + 0.35 = $24.95

Earnings per share: 11.2m/4.6m = $2.435

Today's, P/E: 24.60/2.435 = 10.10

Yesterday's, P/E: 24.95/2.435 = 10.25

So, 10.10 is its P/E ratio today, 10.25 was its P/E ratio yesterday.