Earnings per share is the quotient of a company's net income divided by the number of shares of stock it has outstanding. In other words, EPS is a company's profit expressed on a per-share basis.

The P/E ratio is calculated by dividing the per-share market value by its per-share earnings. From here, the formula for the PEG ratio is simple: Where: P/E is the price-to-earnings ratio (market ...