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Example: Should your stock's prices are $20 and also the EPS is $2 may possibly earnings ratio is ($60 divide $2) therefore just for this simple example the P/E =30. There is one thing you require to know about P/E ratio, and that is, greater the value of the P/E ratio extra time it will take a person to recover your invested income while, the smaller the associated with the P/E ratio the faster and lesser the period it will take you to recuperate your money invested. Lets say that on May 1 the stock price of xyz company is $67 and the premium (cost) is $3,15 for a