Mind Solutions Inc (VOIS)

[Garyedward71]

A corporation is valued by its P/E ratio or in the case of a startup company its future profit projections are used to determine its value. The last time that I looked the NYSE was valued at around P/E=15 lets say a particular stock has a EPS (EARNINGS PER SHARE) = TOTAL PROFIT / OUTSTANDING SHARES of $0.066 to calculate the price of the stock we would multiply the P/E ratio X EPS (15 X $0.066)= $1.00
The NASDAQ stock market has a slightly higher P/E ratio of around 17 so a $ 1.00 / 17 = $0.0588 EPS The OTC stock market I use P/E for a base line P/E(20) X $0.05 = $1.00.

So half of the stocks on any given exchange will either trade higher than the average P/E RATIO and half will trade below the average P/E RATIO. Lets say a start up company is making $0.05 per share but you expect it to ten fold its profits the next year and make $0.50 EPS or P/E = 200 $10.00 per share so this stock will be in high demand your job as an investor is to try to put a bid in for anything less than $10.00 per share. So lets say you bid the stock at P/E(150) or $7.50 per share come next year you would be able to sell the stock for $10.00. For a $2.50 per share profit. So by taking your projections lets calculate the share price at 20(P/E) and at 40 (P/E).

40,000 units X $100=$4,000,000 x 0.25(25% PROFIT) = $1,000,000

$1,000,000 / 2,330,000,000 = $0.00043(EPS) x 20(P/E) = $0.0086

$0.00043(EPS) x 40(P/E) = $0.0172 per share