P/E Ratio Calculator
Calculate price-to-earnings, earnings per share, the PEG ratio and earnings yield from figures you enter.
The price-to-earnings ratio is a payback period wearing a different name. It counts how many years of earnings at the current rate the share price represents, which is why a ratio of 13 and an earnings yield of 7.7% are the same statement written two ways, and why the ratio stops meaning anything at all the moment earnings are not positive. A P/E ratio calculator that prints a figure straight through that boundary is doing arithmetic rather than valuation, and this one declines to.
Formula: P/E = price / earnings per share; PEG = P/E / earnings growth rate
Your figures
Derive it from the accounts, or enter the figure a report already quotes. A loss is entered as a negative number either way.
Profit after tax for the period the ratio is being taken on. A loss is entered as a negative number. Read only when earnings per share is derived.
Read only when earnings per share is entered directly. A loss is entered as a negative number.
Optional — your own estimate, in percentage points, used for the PEG ratio. Nothing is forecast here.
Optional — a multiple to test the entered price against.
Results
P/E ratio
13.04
US$38.50 a share on US$2.9524 of earnings
- Earnings per shareUS$1,240,000,000 across 420,000,000 shares.
- US$2.9524
- P/E ratioThe price divided by the earnings per share: how many years of earnings at the current rate the price represents.
- 13.04
- Earnings yieldEarnings per share as a percentage of the price — the P/E inverted. Unlike the ratio it stays readable through zero: a negative yield says the holder's share of the period's result was a loss of that much of the price.
- +7.669%
- PEG ratioThe P/E divided by the growth rate in percentage points, which is what puts a multiple next to the growth entered beside it.
- 1.630
- Growth rate usedYour own estimate, entered above. Nothing here forecasts it.
- +8.00%
- Net income
- US$1,240,000,000
- Shares outstanding
- 420,000,000
- Market capitalisationThe price multiplied by the share count entered.
- US$16,170,000,000
- Target P/E
- 15.00
- Earnings per share at that multipleThe price divided by the target: the earnings the current price would sit on that multiple.
- US$2.5667
- Net income at that multipleThat earnings per share multiplied by the share count entered.
- US$1,078,000,000
- Price at that multiple on current earningsCurrent earnings per share multiplied by the target multiple.
- US$44.29
- Change in earnings to reach that multipleHow far earnings would have to move for the entered price to sit on the target multiple, with the price held still.
- -13.06%
What this means
Earnings come to US$2.9524 a share. The price of US$38.50 is 13.04 times that, so the price represents that many years of earnings at the current rate, and the same statement inverted is an earnings yield of 7.669%. Set against the 8.00% of annual earnings growth entered above, that multiple is a PEG of 1.630 — the multiple divided by the growth rate in percentage points, and no better founded than the growth estimate put into it. A price-to-earnings ratio is a restatement of two figures entered here and nothing more: it says what the price is as a multiple of the earnings supplied, on the period those earnings cover, and it says nothing about whether either figure is the right one to use.
- Every figure above is yours to enter. No price, share count, earnings figure or commission is fetched from anywhere, and no broker's commission is preset — where a field opens with one it is a round illustration. That is what lets these work on a private company, a delisted one, a statement you would rather check than trust, and a date no live feed still serves.
- Which earnings go in changes the answer entirely. Trailing earnings are reported and historic; forward earnings are somebody's estimate; and an adjusted figure excludes whatever the company chose to exclude. The ratio inherits every property of the number put into it.
- A loss-making company has no meaningful price-to-earnings ratio, and this calculator withholds it rather than printing a negative number that formats perfectly and means nothing. The earnings yield is returned instead, because it behaves sensibly through zero.
- The PEG divides a multiple by a growth rate that is an estimate. It is a comparison of two entered figures, not a valuation, and it is withheld whenever growth is not positive.
- Assumes the price, net income and earnings per share are all in the currency selected above. A company reporting in one currency and listed in another has to be converted first — no exchange rate is applied here.
P/E ratio: 13.04
The link reopens this calculator with the same numbers. Nothing you enter is sent to a server.
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About the P/E Ratio calculation
Working as an earnings per share calculator first, it derives EPS from net income and the share count — or takes a per-share figure you already have — and then returns the ratio, the earnings yield, the PEG against a growth rate you supply, and what earnings would have to be for the price entered to sit on a multiple you name. Every input is yours: no price, no consensus estimate and no growth forecast is fetched from anywhere, which also means the answer is only as good as the earnings figure you chose to put in.
Where this page differs from most is what it does with a loss. Dividing a positive price by negative earnings returns a negative number that formats perfectly and means nothing — and worse, it sorts, so a screen ranked on P/E ascending puts the deepest loss-makers at the top and labels them the cheapest shares on the market. The ratio is withheld here, the reason is named, and an earnings yield calculator runs in its place, because that measure stays readable through zero.
P/E Ratio formula
EPS = net income ÷ shares outstanding
P/E = price ÷ EPS (only when EPS > 0)
earnings yield = EPS ÷ price × 100 (defined at any EPS)
PEG = P/E ÷ growth rate in percentage points
(only when growth is positive)
against a target multiple:
EPS needed = price ÷ target P/E
income needed = EPS needed × shares outstanding
price implied = EPS × target P/E
change needed = (P/E ÷ target P/E − 1) × 100- EPS
- Earnings per share for the period the ratio is being taken over. A loss is a negative figure and is entered as one.
- net income
- Profit after tax on whichever basis you have chosen — reported, adjusted, trailing or forecast. The ratio inherits every property of the figure put in.
- earnings yield
- The P/E inverted and expressed as a percentage. It behaves sensibly through zero, which is exactly where the ratio does not.
- growth rate
- Your own estimate of annual earnings growth in percentage points, used only for the PEG. Nothing on this page forecasts it.
- target P/E
- A multiple you want to test the entered price against — a peer average, a historic level, or a figure you have in mind.
The price to earnings formula is one division, and reading its result as a payback period is what makes its failure modes obvious. At 13 times earnings, thirteen years of profit at the current rate add up to the price paid; at 40 times, forty years do. Now try it with a loss. Earnings below zero never accumulate to the price at all, so the period is not negative — it is undefined, in the same way that asking how long it takes to fill a bath through an open drain has no answer in hours. That is the whole argument for withholding the figure rather than printing whatever the division returns.
The earnings yield survives where the ratio does not, and for a structural reason. Inverting puts earnings in the numerator, so the result varies smoothly through zero instead of exploding at it: a yield of 7.7% says this year's earnings were 7.7% of the price, and a yield of −5.5% says the holder's share of the year's result was a loss of 5.5% of the price. Both are true statements about a real company. The yield is also directly comparable with a bond yield or a deposit rate, which the ratio is not until you invert it in your head.
The PEG divides one entered figure by another and is withheld on the same grounds whenever growth is not positive. Dividing a multiple by a contraction produces a negative PEG, and the convention that a low PEG is attractive then ranks the fastest-shrinking earnings in the sample at the top. Even where growth is positive, the PEG is a comparison of a market price with somebody's estimate — usually the reader's own on this page — and it carries all of that estimate's uncertainty into a figure quoted to three decimal places.
The target-multiple block answers the question people are usually actually asking, which is not what the ratio is but what would have to change for it to be something else. Dividing the price by the target gives the earnings the current price would need; multiplying current earnings by the target gives the price those earnings imply. The change required in earnings simplifies to the current P/E divided by the target, minus one — so a share at 13.04 times earnings tested against a multiple of 15 needs earnings 13.06% lower, or a price about 15% higher, and the two routes are alternatives rather than a sequence.
Which earnings figure goes in changes the answer more than anything else on the page. Trailing earnings are reported, historic and already stale; forward earnings are an estimate that may be revised the week after you read it; an adjusted figure excludes whatever the company decided to exclude, and companies rarely adjust away a windfall. A ratio built on one is not comparable with a ratio built on another, and a great deal of apparent cheapness in a screen is nothing more than two different definitions sitting in the same column.
P/E Ratio: a worked example
A share quoted at 38.50, with the company reporting 1.24 billion of net income across 420 million shares, an 8% annual earnings growth estimate of your own, and a target multiple of 15 to test the price against.
- Earnings per share1,240,000,000 ÷ 420,000,000 = 2.9524
- P/E ratio38.50 ÷ 2.9524 = 13.04
- Earnings yield2.9524 ÷ 38.50 = 7.669%
- PEG13.04 ÷ 8 = 1.630
- EPS needed for a P/E of 1538.50 ÷ 15 = 2.5667, which is 1,078,000,000 of net income
- Change in earnings required13.04 ÷ 15 − 1 = −13.06%
- Price implied by a multiple of 152.9524 × 15 = 44.29
- Same price against a loss of 2.10 a share38.50 ÷ −2.10 = −18.33 — withheld; the yield is −5.455%
Thirteen years of current earnings buy the share, or equivalently the earnings are 7.669% of the price. Reaching a multiple of 15 needs either 13.06% lower earnings at this price or a price of 44.29 on these earnings — two different events, not two steps of one. The last line is the point of the page: swap the profit for a loss of similar size and the naive division returns −18.33, which sorts ahead of every positive ratio in a list ordered low to high and so presents the loss-maker as the cheapest name on the screen, while the yield of −5.455% describes the situation correctly.
How to use the P/E Ratio calculator
- Decide which earnings you are measuring against before you enter anything, and keep it consistent across every company you compare. Trailing reported, trailing adjusted and forward estimated are three different ratios wearing the same label.
- Choose whether to derive earnings per share from net income and the share count or to enter the per-share figure directly. Deriving it shows the market capitalisation and the net income a target multiple would need, which entering it alone cannot.
- Enter a loss as a negative number rather than leaving the field blank. The calculator will tell you the ratio is withheld and why, and will show the earnings yield, which is the figure that still means something.
- Add a growth estimate only if you have a considered one. A PEG ratio calculator divides your own forecast into a market price, so the result is no better founded than the estimate you typed into it.
- Use the target multiple to ask a specific question — what a peer average would imply, or what earnings would have to be at today's price — rather than as a valuation. It restates the two figures entered and forecasts nothing.
- Keep the price, net income and earnings per share in one currency, since no conversion is applied to any of them.
Limitations of the P/E Ratio calculator
Every calculation makes assumptions. These are the ones that matter here.
- Withholds the ratio entirely when earnings are zero or negative. That is deliberate rather than a gap, and the earnings yield is returned in its place because it remains meaningful on both sides of zero.
- Takes the earnings figure at face value. Nothing here checks whether it is trailing or forward, reported or adjusted, one-off-laden or clean, and every one of those choices moves the answer more than a rounding of the price does.
- Ignores capital structure completely. A company with heavy net debt and one with a large net cash balance can trade on identical P/E ratios while costing very different amounts to own outright, which is what enterprise value multiples exist to capture.
- Compares nothing to anything. A ratio in isolation is not high or low; it becomes one only against a peer group, a sector, a history or an alternative use of the money, none of which this page supplies.
- The PEG assumes growth entered as a single annual rate holds steady, which earnings rarely do. It also has no theoretical anchor — the convention that 1.0 is fair value is a rule of thumb, not a result.
- Excludes dividends, buybacks and everything else about how earnings are returned to shareholders. Two companies with the same ratio can distribute very differently, and the ratio is silent on it.
Frequently asked questions about P/E Ratio
Why does this P/E ratio calculator refuse to show a ratio when earnings are negative?
Because the number it would print is not a low ratio, a high ratio, or a valuation of any kind. The P/E counts years of current earnings the price represents, and a company earning nothing never gets there, so the period is undefined rather than negative. Printing it is actively harmful in a sorted list, where negative ratios rank as the cheapest shares on the screen.
What does a P/E of 13 actually tell me?
That the price is thirteen times the earnings figure you entered, on the period those earnings cover — equivalently, that thirteen years of profit at the current rate add up to what a share costs. It is a restatement of two numbers and nothing more. It says nothing about whether those earnings will persist, grow or vanish, and nothing about whether thirteen is a lot.
Trailing or forward earnings — which belongs in the box?
Both are used, and they answer different questions. Trailing earnings are facts already reported and are stale by construction; forward earnings are an estimate and carry whatever bias the estimator brought. The mistake is mixing them: a forward ratio for one company set against a trailing ratio for another compares a hope with a record and will usually flatter the hope.
What counts as a good P/E ratio?
There is no threshold that holds across sectors, interest rate environments or growth profiles, and this calculator names none. A stable utility and a fast-growing software company have traded at multiples several times apart for decades without either being mispriced by that fact alone. The ratio is a comparison tool, and the comparison has to be against something specific to be worth anything.
Why is the PEG ratio withheld when my growth estimate is negative?
Because dividing a positive multiple by a negative growth rate produces a negative PEG, and the usual reading — that a lower PEG is more attractive — would then rank the company with the fastest-shrinking earnings as the most appealing in the sample. The result is arithmetically fine and interpretively backwards, so it is not shown.
How does earnings yield differ from dividend yield?
Earnings yield is the whole of the profit attributable to a share expressed as a percentage of the price, whether or not any of it was paid out. Dividend yield is only the part that actually reached the holder in cash. A company retaining everything it earns has a substantial earnings yield and a dividend yield of zero, and the gap between the two is what is being reinvested in the business.
Last reviewed . See our methodology and editorial policy.
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