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The P/E is a measure of how much investors are willing to pay for the company’s earnings. You calculate the P/E by dividing the current stock price by its earnings per share.

It is important to note that using the P/E by itself doesn’t give you a complete (or in some cases accurate) picture of the stock’s value.

Several factors can change the P/E. First, earnings per share may not show a true picture of the company’s earnings thanks to monkeying around with the numbers.