The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following? $\begin{array}{|l|r|r|r|r|}
\hline \text { Four most recent quarters } & Q 1 & Q 2 & Q 3 & Q 4 \
\hline \text { EPS } & \$ 0.36 & \$ 0.42 & \$ 0.43 & \$ 0.39 \
\hline \text { Share Price } & \$ 42 & \$ 56 & \$ 62 & \$ 40 \
\hline
\end{array}$

A)26.6
B)31.25
C)0.01
D)25.0

Question

The P/E ratio for the last 12 months for the company below is most likely to be calculated as which of the following? $\begin{array}{|l|r|r|r|r|}
\hline \text { Four most recent quarters } & Q 1 & Q 2 & Q 3 & Q 4 \
\hline \text { EPS } & \$ 0.36 & \$ 0.42 & \$ 0.43 & \$ 0.39 \
\hline \text { Share Price } & \$ 42 & \$ 56 & \$ 62 & \$ 40 \
\hline
\end{array}$

A)26.6
B)31.25
C)0.01
D)25.0

Quizplus · Accepted Answer

The P/E ratio is calculated by dividing the current share price by the sum of the EPS (Earnings Per Share) over the last 12 months. Summing the EPS for Q1 through Q4 gives $0.36 + $0.42 + $0.43 + $0.39 = $1.60. Assuming the current share price is the last one listed, $40, the P/E ratio is $40 / $1.60 = 25.0.

The P/E Ratio for the Last 12 Months for the Company