Activity Sheet 1: About P/E Ratios
Remember the P/E ratio is the current price of the stock divided by its
current yearly earnings per share. For example, a stock that is $20.00
and earns $2.00 per share will have a P/E ratio of 10 (20 divided by
2).
Company*
Mona Lisa Soup Co.
Real Grain Foods
Jean Pool Enterprises
UR Way Foods
52-Week
High
37.60
50.87
57.25
36.67
52-Week
Low
28.80
42.41
47.05
27.44
Earnings
per Share
(EPS)
.68
2.52
2.31
1.92
Price per
share
37.41
49.81
55.96
34.30
P/E Ratio
55.01
19.77
24.23
17.86
*The companies used in this chart are fictional. Similarities to real companies are coincidental and
unintended.
1. Each company in the above chart is from the food industry. Do any
of them appear overvalued? Explain.
2. Which stock is the most expensive, that is cost the most per share
for a $1 of earnings? Explain.
3. Which stock seems to be doing well as compared to its 52 week
high and low? Explain.
4. How would you use the PE ratio to decide which stock to purchase?
Explain.
© 2021 SIFMA Foundation. All rights reserved. 1 of 2
Select three companies to compare in the same industry or sector
from your portfolio. Using http://finance.yahoo.com, look up the
information necessary to complete the chart
Company
52
week
High
52
week
Low
Earnings
Per share
Price
per
share
P/E
ratio
1. Each company is from the same industry or sector. Do any seem
overvalued? Explain.
2. Which stock is the most expensive, that is, cost the most per share
for $1 of earnings? Explain.
3. Which stock seems to be doing the best as compared to the 52week high and low? Explain.
4. Using the information you collected, would you purchase more of
these stocks? Explain.
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