The Importance of Price to Earnings Ratio

The goal of a business is to turn a profit. Price to earnings ratio gives us basically ensures that as investors, we're getting a fair share of the profits. If it costs him $20 to make a water bottle and he only sells them for 25, you're looking at what, a $5 profit. So if in an example, let's say his business is making like $100, let's make it easy. Okay, he's selling the business for $100 and he's making $20 a profit,Let's say per year. So I'm putting in 50, I'm getting 10 every year. In five years, I'm going to make my money back.