SPONSORED

Price Earnings Calculator

LAST UPDATE: September 1st, 2018

Calculator

What is Price Earnings (P/E)

Price Earnings is the ratio of the company’s share price to the earnings per share.

A P/E ratio of ‘1’ means that the company’s stock is trading at the same earnings per share as the company earns in one year.

A P/E ratio of ‘5’ means that the company’s stock is trading at 5 times the earnings per share that the company earns in one year.

A higher P/E ratio means that the company’s stock is trading at a high multiple to the latest earnings of the stock.

A lower P/E ratio means that the company’s stock is trading at a low multiple to the latest earnings of the stock.

Formula

Price / Earnings = Price per Share / Earnings per Share

Example

A business has a share price of $35 and earnings per share of $2.5.

P/E = $35 / $2.5 = 14.00

Therefore, this company’s price/earnings is 14.00.

Sources and more resources