Finance

Price-Earnings Ratio Calculator

Calculate the P/E ratio from share price and earnings per share.

This P/E ratio shows how many dollars investors pay for each dollar of earnings per share.

Formula

P/E equals share price divided by earnings per share.

How it works

P/E compares what investors pay for each dollar of earnings. High P/E can mean high growth expectations — or overvaluation. It is meaningless with negative earnings and varies greatly by industry.

Worked example

For example, a share price of $100 divided by earnings per share of $5 gives a P/E ratio of 20.00, because $100 ÷ $5 = 20.00.

FAQs

What is a normal P/E?
It varies by sector and market conditions; compare within the same industry.

Why is it useless for loss-making firms?
Negative earnings give a negative P/E, which does not rank value sensibly.

Does P/E predict returns?
No — it is one valuation snapshot, not a forecast.

Are these figures financial advice?
No — they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.

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