About the P/E Ratio Calculator
What is the P/E Ratio Calculator?
The price-to-earnings (P/E) ratio shows how many rupees investors pay for each rupee of a company's annual profit. It is the most widely used valuation measure for shares: a P/E of 20 means the share costs 20 times its yearly earnings per share.
Enter the share price and the trailing twelve-month EPS. Add an expected earnings growth rate to get the PEG ratio, which adjusts the P/E for growth — a fast-growing company can justify a higher P/E.
How to use the P/E Ratio Calculator
- Share Price (₹) (sample: 2,500)
- Earnings per Share – last 12 months (₹) (sample: 125)
- Expected EPS Growth (% per year, for PEG) (sample: 15)
- Press Calculate P/E Ratio (results also refresh as you type). The result card shows the P/E Ratio, along with Earnings yield (EPS ÷ price), Years of current earnings to recover the price, PEG ratio (P/E ÷ growth) and PEG reading.
Formula used
P/E = Share price ÷ Earnings per share
- Earnings yield = EPS ÷ Price × 100 (the inverse of P/E)
- PEG ratio = P/E ÷ expected EPS growth rate (%)
P/E is not meaningful when EPS is negative (loss-making companies).
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Share Price (₹) | 2,500 |
| Earnings per Share – last 12 months (₹) | 125 |
| Expected EPS Growth (% per year, for PEG) | 15 |
| Result | Value |
|---|---|
| P/E Ratio | 20× |
| Earnings yield (EPS ÷ price) | 5% |
| Years of current earnings to recover the price | 20 |
| PEG ratio (P/E ÷ growth) | 1.33 |
| PEG reading | 1 to 2 – fairly valued for its growth |
Tips for using the P/E Ratio Calculator
- Compare P/E only within the same industry — banks, FMCG and IT trade at very different multiples.
- Compare a company's P/E with its own 5- and 10-year average.
- A PEG below 1 can indicate a company that is cheap relative to its growth.