Enter the current price of a stock and the total earnings of that company into the price/earnings calculator. The result will be a ratio of price to earnings in decimal and percentage.

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## Price/Earning Ratio Calculator

The following formula is used to calculate the price-to-earnings ratio of a company.

P/E = PS / E

- Where P/E is the price-to-earnings ratio
- PS is the current stock price
- E is the total yearly earnings.

To calculate the price-to-earnings ratio, divide the current stock price by the yearly earnings.

It’s important to note that the ratio will be in terms of however long the period of earnings is that you enter into the calculator. For example, the ratio will be different if you use quarterly earnings as opposed to yearly earnings.

## Price to Earnings Ratio Definition

Price to earnings ratio, or P/E for short, measures the current stock price, or market cap, to the total yearly earnings.

## How to calculate the price-to-earnings ratio?

How to calculate the price-to-earnings ratio?

**Determine the total price of the stock**Look up your company through Google and determine the stock symbol it’s traded under. Look up that stock symbol and find the price of the stock.

**Determine the earnings of the company**Look of the total earnings of a company using their 10-K or a trading dashboard/platform.

**Calculate Price/Earnings Ratio**Enter the information into the formula to calculate the ratio.

## FAQ

**What is price/earnings ratio?**

This is a ratio that represents the price of a stock compared to the total earnings of the underlying company associated with that stock.

**Does price/earnings ratio represent the value of a company?**

This ratio is one of many indicators used to value a company, but not the only one. For example, a company that has a high potential for massive earnings in the future but currently with low earnings will have a very high ratio.