Financial Ratio Calculator
Compute key financial ratios (P/E, ROI, margin, etc.) from input values.
Description of what the Financial Ratio Calculator does. Development utilities streamline workflows and increase productivity. Our utility provides solutions to common challenges faced by developers. This tool helps eliminate tedious manual work with automated processing.
How to Calculate & Interpret: P/E (Price-to-Earnings) Ratio
Formula: Current Share Price / Earnings Per Share (EPS)
Steps:
- Enter the 'Current Share Price' of the company (e.g., $150). This is the current market price of one share.
- Enter the company's 'Earnings Per Share (EPS)' (e.g., $5). EPS is the portion of a company's profit allocated to each outstanding share of common stock. EPS cannot be zero for this calculation.
- Click 'Calculate'.
Example: If a stock is trading at $150 per share and its EPS is $5, the P/E ratio is $150 / $5 = 30.
Interpretation: The P/E ratio helps investors determine the market value of a stock compared to the company's earnings. A high P/E could mean a stock's price is high relative to earnings and possibly overvalued. Conversely, a low P/E might indicate the current stock price is low relative to earnings, potentially undervalued. It's best used to compare companies in the same industry or against a company's historical P/E. A negative P/E (if EPS is negative) indicates the company is losing money.