Obviously P/E ratios will be larger when the denominator, E, is smaller. It's just plain old arithmetic. The way to lower the P/E ratio is to drop the Price or

Obviously P/E ratios will be larger when the denominator, E, is smaller. It's just plain old arithmetic. The way to lower the P/E ratio is to drop the Price or increase the Earnings. In case you think the P/E ratio is just some fancy magic number for wannabe investors, the P/E ratio is the number of years it takes for the stock to earn you back the price you paid for it. That's why the smaller the P/E, the better that stock is.