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Finance Lesson 2 done.
You can compute P/E two ways and explain why they differ, size a company with market cap, use forward earnings, and see when P/B means something and when it doesn't. Next: free cash flow, the number a DCF is built on.
What you're learning
P/E = share price ÷ earnings per share: how many dollars investors pay for one dollar of yearly profit. Trailing P/E uses the last 12 months of earnings; forward P/E uses the next 12 months as analysts expect them.
Market cap = price × shares outstanding: what the whole company is worth at today's price. Book value is shareholders' equity from the balance sheet; P/B compares the price with it.
A ratio is a starting point for questions, not an answer: a high P/E can mean expected growth or an expensive stock. Figures are Apple's fiscal 2022 numbers from its 10-K, and the closing price on September 23, 2022, the last trading day of that fiscal year. Educational content, not investment advice.