A beginner's guide to p/e ratios (price to earnings ratio)

[Brhoooom2009]

This is very helpful

[bloomerstom]

Hi I have a question,

So a low p/e ratio could suggest a bargain but there could also be underlying problems that explain the low p/e ratio. Could you explain if p/e ratio = (price per share/ earnings per share), how would bad news or risk be accounted into either of these two factors, thus causing the p/e to be cheaper? have I misinterpreted this?