The CAPE Ratio is a valuation measure that uses real earnings per share (EPS) over a 10-year period. It is used to determine the company's financial performance while considering the impact of different economic cycles on the company's earnings.The CAPE ratio was developed by Yale University professors Robert Shiller and John Campbell in order to provide an alternative to the price-earnings ratio for valuing stocks.The CAPE ratio is calculated by dividing the current price of a stock by its average inflation adjusted earnings from the past 10 years. This number can be interpreted as how much money you would have to spend today in order to make as much money in 10 years as you would with your investment at its current price.