Definition

P/E ratio

Price per share divided by earnings per share — what the market charges for a dollar of current earnings. The multiple is shorthand for a full set of expectations: how fast earnings grow, how risky they are, and how much must be reinvested to sustain them. The live multiple requires a market price, which arrives with the licensed market-data feed; the earnings input below comes from the filing.

Formula

P/E = Price per share ÷ Diluted EPS  ·  (structurally: P/E ≈ payout × (1 + g) ÷ (r − g))

Drivers — what actually moves it

Expected growth (g): faster expected earnings growth supports a higher multiple — the largest single driver.
Risk / required return (r): higher rates or riskier earnings raise the return investors demand, compressing the multiple.
Payout / reinvestment: the share of earnings a business must retain to fund its growth — high-ROE growth is worth more per earnings dollar.
Earnings quality: one-offs, accounting choices, and cyclicality make the E unstable; the multiple inherits every flaw in it.
Dilution: a rising share count quietly raises the effective multiple paid per share of the business.

Where to find it in the filing

Income statement (the E); the P is market data, not a filing item. 10-K Item 8 — diluted EPS beneath net income. Price has no filing source: the live multiple is computed only when a licensed market feed is present.

XBRL concepts Echelon grounds to: EarningsPerShareDiluted

Sector caveats — where this breaks

Meaningless when earnings are negative or near zero — the ratio explodes or flips sign; use revenue or book multiples there instead.
Cyclical earnings invert the read: peak-cycle earnings make the multiple look low exactly when earnings are least sustainable.

Drill it in a live lesson Diluted EPS Return on equity EV/EBITDA EV/Sales Earnings yield Dividend payout ratio

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.