# How to analyze the price-earnings ratio?

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### How to analyze the price-earnings ratio?

We calculate the **price ratio**–**profit** by dividing the current market price of the common stock by the **profit** per common share (EPS) for the last reporting period. Private companies and smaller companies sometimes use this **ratio** as a rule of thumb for valuing a business.

### How to calculate profit?

Calculate profit 1 Type of calculation: Calculate profit rate (from buy and sell prices) Calculate sell price (from buy price and sell rate) 2 * Buy price : eg 1650.75 3 * Sale price: eg 1768.25 4 * Profit rate (%): eg 10.75

### How to calculate gross profit?

Here are the two calculation formulas: Gross profit = selling price – cost Net profit = gross profit – -expenses + depreciation of assets + provisions) Our company made big profits last year.

### How to calculate the net profit of a company?

This net profit is distributed, in joint-stock companies, between the shareholders in the form of dividends and the company itself to increase its self-financing capacity. The net profit divided by the number of shares makes it possible to assess the performance of a company. How to calculate profit?

### What is the difference between profit and loss?

When the difference between a company’s income and expenses is positive, its net income shows a profit. When this difference is negative, it is called a deficit or a loss.