This article is written for those who want to get better at using price to earnings ratios (P/E ratios). To keep it practical, we’ll show how Huchems Fine Chemical Corporation’s (KRX:069260) P/E ratio could help you assess the value on offer. Based on the last twelve months, Huchems Fine Chemical’s P/E ratio is 11.68. That means that at current prices, buyers pay ₩11.68 for every ₩1 in trailing yearly profits. The higher the P/E ratio, the higher the price tag of a business, relative to its trailing earnings. That is not a good or a bad thing per se, but a high P/E does imply buyers are optimistic about the future. We can get an indication of market expectations by looking at the P/E ratio. You can see in the image below that the average P/E (12.4) for companies in the chemicals industry is roughly the same as Huchems Fine Chemical’s P/E. Huchems Fine Chemical’s P/E tells us that market participants think its prospects are roughly in line with its industry. So if Huchems Fine Chemical actually outperforms its peers going forward, that should be a positive for the share price. Checking factors such as director buying and selling. could help you form your own view on if that will ...