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    Harleygirl35's Avatar
    Harleygirl35 Posts: 3, Reputation: 1
    New Member
     
    #1

    Oct 14, 2009, 07:20 AM
    Price/Earnings ratio
    Not sure if I did this problem right.. please clarify? :confused:


    A company has an EPS of $2.00
    Cash flow per share of $3.00
    Price/cash flow ratio of 8.0x
    What is its P/E ratio?

    Price Per Earnings Ratio = Market Value Per Share / Earnings Per Share (EPS)

    8.0 x 3.00 = 24/2

    P/E = 12X
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
     
    #2

    Oct 14, 2009, 02:20 PM
    You nailed it... good job.

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