It is painful to state that so many important investment decisions are based on a P/E ratio, but it is very hard to find a clear explanation on how to calculate this very P/E for a given company. This article is written to demonstrate, how to calculate Earnings Per Share (EPS) and P/E using Newmont Mining (NEM) as an example. We have to start with obvious banality: Price-to-Earnings ration (P/E) is a Stock Price ($50) divided by the total of last 12 month earnings. What type of earnings we need to get? We need “Net Income Applicable To Common Shares”. Where can we get this information? Some free sites provide last…
