3. To provide a starting point for gauging a company’s relative valuation, analysts often look at a company’s price-to-earnings (P/E) ratio. Returning to the COMPANY OVERVIEW page, you can see XOM’s current P/E ratio. To put this number in perspective, it is useful to compare this ratio with other companies in the same industry and to take a look at how this ratio has changed over time. If you want to see how XOM’s P/E ratio stacks up to its peers, click on the tab labeled PEERS. Click on FINANCIALS on the next row of tabs and then select KEY FINANCIAL RATIOS. Toward the bottom of the table you should see information on the P/E ratio in the section titled Market Value Ratios. Toward the top, you should see an item that says CLICK HERE TO SELECT NEW PEER SET—do this if you want to compare XOM to a different set of firms.

For the most part, is XOM’s P/E ratio above or below that of its peers? Off the top of your head, can these factors explain why XOM’s P/E ratio differs from its peers?