Price-to-Earnings Ratio Calculator

How to use it

1. {'step': 1, 'description': 'Divide price by EPS', 'calculation': '$145 ÷ $8.75 = 16.57'}
2. {'step': 2, 'description': 'Interpret the ratio', 'calculation': 'Investors pay $16.57 for each $1 of earnings'}

Common mistakes

• ⚠️ Comparing P/E ratios across different industri is without context
• ⚠️ Using P/E for compani is with negative or distorted earnings
• ⚠️ Not considering growth rate when evaluating P/E (use PEG ratio)

Worked example

Calculating P/E ratio for stock trading at $145 with earnings per share of $8.75.

The pe of {pe}x shows how many dollars investors pay per dollar of earnings.

Input guide