Abstract: Price-to-Earnings ratio, one of the most widely used tools for stock selection, a relative valuation technique which always remained as a center concern of investors and market analysts. Variations of P/E ratio have significant impact on investor’s perception and several factors are responsible for the variations of P/E ratio. This paper is an attempt to identify the major determinants for P/E ratio of manufacturing companies listed in Dhaka stock exchange. Descriptive statistics, correlation matrix and regression analysis are used to accomplish the objectives of this paper. Results reveal that dividend yield, leverage, size and net asset value per share are significant determinants of P/E ratio where dividend yield and size have negative influence but leverage and net asset value per share have positive influence on P/E ratio. This paper is an evidence for fundamental analysts or decision makers to evaluate determinants that explain variations in Price-to-Earnings ratio of manufacturing firms of Bangladesh.