Chapter 2 discusses the concepts of "Earnings Per Share (EPS)" and "Price Earnings Ratio (P/E)". The price earnings ratio is derived by dividing the market price of one share of common stock by the earnings per share. Please discuss why the firm's financial manager would want to calculate the firm's P/E and how it can be used to compare the firm's performance to other firms in the same industry. In forming your discussion, you might want to think about the equation (P/E = Price divided by EPS). Consider each of the three components of the equation and what they represent. In your comments, be sure to include the factors that influence the market price of the stock and therefore the price earnings ratio.