Price to Earnings Ratio or (P/E Ratio) is a popular calculation and one of the many ways to valuate a company based on its current share price. For example, if a company's P/E ratio is 200, that means for every $200 you spend buying the company stock, you expect $1 in earnings next year or simply put, you are spending $200 to make $1.
P/E ratio is also a good indicator to use to help you figure out how over/undervalued a company's current share price is and based on your own risk profile.
The formula for determining the Price To Earnings Ratio is defined as:
\(PE\): Price to earnings ratio
\(EPS\): Earnings per share
\(Price\): Current share price
\(EPS\): Earnings per share
P/E Ratio (EPS)
Use this calculator to find the P/E ratio of a public company using EPS.
Please note, that all calculators provided are for informational and educational purposes ONLY, and should NOT be taken as professional financial advice.
