### FRPriceEarningsRatio (MarketPrice, EarningsPerShare)

Basic and Crystal syntax.

##### Format

`FRPriceEarningsRatio(MarketPrice, EarningsPerShare)`

##### Arguments

- MarketPrice is a Number or formula. MarketPrice is the current market price of a company's common share. This information is publicly available if the company's shares are traded in a stock exchange.
- EarningsPerShare is a Number or formula. EarningsPerShare is the amount of earnings that is attributable to each common share. This information is available in a company's financial reports.

##### Action

FRPriceEarningsRatio returns the ratio between MarketPrice and EarningsPerShare (for example, PriceEarningsRatio = MarketPrice / EarningsPerShare (12 months)).

##### Typical uses

This ratio is used as a comparison between the share's market price and its earning ability. It is a convenient figure and it can be used easily to compare one company's earning ability with another.

##### Examples

The following examples are applicable to both Basic and Crystal syntax:

`FRPriceEarningsRatio(3.5, 2)`

Returns 1.75.

`FRPriceEarningsRatio(27, 1.5)`

Returns 18.

Note: None of the arguments can be negative; you may have to check for negative values before passing the arguments.

##### Comment

FRPriceEarningsRatio is one of the many financial analysis tools used in interpreting the financial position of a company. As in the case of all ratios, it has to be used with caution. It can just be used as a clue and not solid proof for forming a judgment on the financial status of a company.

Neither one of the ratios can be used alone for doing financial analysis and there are no fixed rules on the results of the ratios. Apart from differences between type of industries, result varies among different companies within the same industry and within different account periods. The results should only be used for relative comparison and trend analysis, rather than treating them as something absolute.

Seagate Software, Inc. http://www.seagatesoftware.com Please send comments to: techpubs@seagatesoftware.com