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:

\(PE\) \(=\) \(\dfrac{Price}{EPS}\) \(=\) \(Price\) \(\times\) \(\dfrac{Shares\text{ }Outstanding}{Net\text{ }Income}\)

\(PE\): Price to earnings ratio

\(EPS\): Earnings per share

\(Price\): Current share price

\(Net\text{ }Income\): How much money company is making after all expenses have been paid including taxes.

\(Shares\text{ }Outstanding\): How many shares have been issued by the companies.

\(Ratio\): How many shares will a single share be divided into, for example, enter 3, if the ratio is 3:1

## P/E Ratio (Forward Split)

Use this calculator to find the P/E ratio of a public company after a forward stock split

Current share price

\(Price\)

\($\)

How much money company is making after all expenses have been paid including taxes.

enter a number in thousands, enter 5 for 5,000 or 50 for 50,000

enter a number in thousands, enter 5 for 5,000 or 50 for 50,000

\(Net\text{ }Income\)

\($\)

How many shares have been issued by the companies.

enter a number in millions

enter a number in millions

\(Shares\text{ }Outstanding\)

How many shares will a single share be divided into, for example, enter 3, if the ratio is 3:1

\(Ratio\)

Please note, that all calculators provided are for informational and educational purposes ONLY, and should NOT be taken as professional financial advice.

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