# Price Of Earnings Ratio Calculator Online

Price/Earnings Ratio Calculator

# Price Earnings Ratio Calculator

Price/earnings ratio – also often called the price to earnings ratio or the P/E ratio – is a finance indicator that measures a company. Price  Earnings Ratio is equal to share price divided earnings per share

Formula us,

P/E ratio = share price / earnings per share

Let us consider,

• Price per share – the market price of a stock. This value heavily depends on the supply and demand on the market.
• Earnings per share – the profit which a company gains from each outstanding share of common stock. If a company doesn’t have any net income, but only net losses, it won’t have a P/E ratio.

## Calculate the price/earnings ratio

1. Determine the market share price. Let’s assume that it is equal to \$25.
2. Determine the earnings per share over the last 12 months. In our example, we’ll set this value to \$1.80.
3. Use the price/earnings ratio formula:

P/E ratio = share price / earnings per share

P/E ratio = 25/1.80 = 13.9