P/E Ratio Calculator

Calculate price-to-earnings ratio and earnings yield from share price and earnings per share

Your result will appear here.

About the P/E Ratio Calculator

Price-to-earnings ratio compares a company’s share price with earnings per share. It is one of the most widely used equity valuation multiples because it shows how much investors are paying for each unit of reported earnings.

P/E does not tell you whether a stock is cheap or expensive by itself. Growth expectations, risk, accounting quality, industry structure and the sustainability of earnings all influence a reasonable multiple.

How to Use the P/E Ratio Calculator

  1. Enter share price.
  2. Enter earnings per share for the same earnings basis.
  3. Calculate the P/E ratio.
  4. Label whether the earnings are trailing, forward or adjusted before comparing companies.

How the Calculation Works

P/E = share price ÷ earnings per share.

Trailing P/E typically uses historical EPS, while forward P/E uses forecast EPS. If earnings are zero or negative, the ordinary P/E is undefined or not economically meaningful.

Worked example

P/E Ratio Calculator Worked Example

$60 share price and $4 EPS

P/E = $60÷$4 = 15 times.

Result guide

Understanding Your P/E Ratio Calculator Result

A P/E of 15 means the market price equals 15 times the selected annual earnings per share. It does not imply that an investor will recover the purchase price in exactly 15 years.

Before you rely on the answer

Assumptions and Limitations

  • Price and EPS refer to the same share class.
  • EPS definition is stated clearly.
  • Positive earnings are required for ordinary ratio interpretation.

Practical tip

Using This Result in Practice

Compare P/E with growth, margins and balance-sheet quality. A low multiple can reflect genuine undervaluation or a market expectation that earnings will decline.

Related calculations

Useful Calculations to Continue With

If you want to compare annual dividend income with share price, use the Dividend Yield Calculator.

If you want to see how much of earnings is being distributed as dividends, use the Dividend Payout Ratio Calculator.

Common questions

P/E Ratio Calculator FAQ

What does a P/E of 20 mean?

The share price is 20 times the selected annual earnings per share.

Can P/E be negative?

A mathematical negative can result from losses, but analysts usually treat P/E as not meaningful when earnings are negative.

What is forward P/E?

Share price divided by forecast future earnings per share.