Price-to-Earnings Ratio (P/E) shows the ratio of a company's stock market price per share to its earnings per share (EPS). P/E ratio is used to quickly assess whether a company's stock is "fairly" valued. P/E is calculated using the following formula:
$$P/E = \frac{Stock\; Market\; Price}{EPS}$$
Generally, a P/E ratio value in the range of 10-20 is considered normal.
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