Earnings after taxes of $280,00 in 2006 with 200,000 saresof stock outstanding. The stock price was $30.80. In 2007, earnings after taxes increased to $320,000 with the same 200,000 shares outstanding. The stock price was $40.00.
a) Compute earnings per share and the P/E ratio for 2006.
The P/E ratio equals the stock price divided by earnings per share.
b) Compute earnings per share and the P/E ratio for 2007.

Something per something is always the first something divided by the second something. This always works, for everything, every subject. This is no different than paying $50 for 4 shirts and wanting to know what you paid per shirt.

You want earnings per share. That's always a division, in that order.

You've already written the equation for P/E, which you can do once you have EPS.

Give it a try.