Price-to-earnings info on S&P 500 requires a little math

— -- Q: Where can I find the most up-to-date price-to-earnings of the Standard & Poor's 500?

A: The price-to-earnings (P-E) ratio is an important measure investors often consider when studying a stock. But it can also be helpful when examining the broader market.

Just a quick reminder of what a P-E ratio is. At its simplest level, a P-E is a company's stock price divided by its earnings over the previous 12 months, for what's called the trailing P-E. And the forward P-E is the stock price divided by what the company is expected to earn over the next 12 months.

These stats are readily available for stocks on financial websites like the Money section of USATODAY.com. The P-E tells you how much investors are willing to pay for every dollar the company generates in earnings. The higher a stock's P/E, the more richly valued the company is.

The P-E analysis can also be helpful with market indexes. Curious if the stock market is getting highly valued? Get the P-E for a major market index, such as the Standard & Poor's 500 stock index.

You can easily find that by going to our Money front page, clicking on the blue "S&P 500" link under Market Summary, next to the chart. The quote page shows the current S&P 500 P-E ratio.

You can also figure it yourself. The best way I've found to do this analysis is by using Standard & Poor's website. On that page, scroll down a bit an click on the link that says "click here." A spreadsheet will open that shows how much the companies in the S&P 500 have earned.

To get the trailing P-E ratio, add the earnings from the previous four quarters in the operating earnings per share column. Divide the sum of the four quarters' earnings into the current value of the S&P 500. The result is the S&P 500's trailing P-E ratio.

Matt Krantz is a financial markets reporter at USA TODAY. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns.