Just what is a P/E Ratio?

P/E Ratios (Price to Earnings Ratios) are a good place to start judging the quality of a stock. Granted, they shouldn't be the only thing you use when determining when or if you want to buy a stock, but they can be a good place to start from. It is one way of valuing a company. A company with a lower P/E is cheaper than a company with a high P/E. This does not necessarily give you an indication of how well a company is doing, but merely the cost of the stock compared to the earnings of the company.