The price-earnings ratio is determined by dividing the price of a product by its profit margin.

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The price-earnings ratio (P/E ratio) is determined by dividing the current market price of a stock by its earnings per share (EPS). It is a valuation ratio that helps investors assess whether a stock is overvalued or undervalued relative to its peers or the overall market. The P/E ratio does not involve dividing the price of a product by its profit margin.

The Price-Earnings Ratio Is Determined by Dividing the Price of a Product