The trailing Price-to-Earnings (P/E) ratio is a key financial metric used to assess a company's stock price relative to its earnings over the past 12 months (i.e., "trailing" refers to historical earnings). It helps investors determine if a stock is overvalued or undervalued by comparing its price to its earnings.

### Formula for Trailing P/E:
\[
\text{Trailing P/E} = \frac{\text{Current Stock Price}}{\text{Earnings Per Share (EPS) for the Past 12 Months}}
\]

### Steps to Calculate Trailing P/E:

1. **Determine the Current Stock Price**: 
   You can get the stock price from a financial website or stock exchange listing.

2. **Find the Earnings Per Share (EPS)**: 
   EPS is typically available in a company's financial reports or on financial data websites. For the trailing P/E, you need the EPS for the **last 12 months**.

3. **Apply the Formula**:
   Divide the current stock price by the trailing 12-month EPS.

### Example:
- **Current Stock Price** = $100
- **EPS for the past 12 months** = $5
\[
\text{Trailing P/E} = \frac{100}{5} = 20
\]

So, the trailing P/E ratio is **20**.

This means that investors are willing to pay 20 times the company's earnings per share for its stock.

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Would you like further clarification on any of the steps or the concept?

Here are 5 related questions to explore further:

1. What is the difference between trailing and forward P/E ratios?
2. How can trailing P/E be used to compare companies in the same industry?
3. Why is a high trailing P/E ratio not always a bad thing?
4. How can you adjust P/E ratios for companies with irregular earnings?
5. What other metrics can complement the trailing P/E when analyzing a stock?

**Tip:** Always check if earnings include non-recurring items like one-time gains or losses, as they can distort the P/E ratio.

Learn how to calculate the trailing P/E ratio, a key financial metric that compares a company's stock price to its earnings over the last 12 months. This guide provides a clear formula, a practical example, and detailed steps, ideal for finance students and investors.

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