It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time. The formula and calculation used for this process follow. EPS comes in two main varieties. This is the company's best-educated guess of what it expects to earn in the future. A third and less common variation uses the sum of the last two actual quarters and the estimates of the next two quarters. Sometimes called "estimated price to earnings," this forward-looking indicator is useful for comparing current earnings to future earnings and helps provide a clearer picture of what earnings will look like — without changes and other accounting adjustments.
An error occurred. Please try again by refreshing your browser or contact us with details of your problem. The price to earnings ratio PE Ratio is the measure of the share price relative to the annual net income earned by the firm per share.