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
\(Net\text{ }Income\): 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.
\(Ratio\): The factor of which the number of shares will be reduced by. For example, enter 3 if the ratio is 3:1
P/E Ratio (Reverse Split)
Use this calculator to find the P/E ratio of a public company after a reverse stock split
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
How many shares have been issued by the companies.
enter a number in millions
The factor of which the number of shares will be reduced by. For example, enter 3 if the ratio is 3:1
Please note, that all calculators provided are for informational and educational purposes ONLY, and should NOT be taken as professional financial advice.
