# PE 10

PE 10 is the current stock price divided by the average of the last 10 years' earnings per share.

Metrics of this nature were originally popularized by Benjamin Graham, often called the father of value investing. He used this measurement because it is less sensitive to short term economic fluctuations or accounting distortions which can affect a single year's earnings and PE ratio.

Hence, for stable businesses with long histories, PE 10 gives a better picture of price relative to historical earning power than a standard 1 year PE ratio.

PE 10 = Price / Average of last 10 Years Earnings Per Share

YCharts uses the average of the last 40 quarters of earnings per share ttm in the denominator. Mathematically:

Average of last 10 years Earnings Per Share = (Quarterly EPS_{t} + Quarterly EPS_{t-1} + . . . + Quarterly EPS_{t-39}) / 40