Price/Earnings Ratio Calculator





Formula

The formula to calculate the Price/Earnings (P/E) Ratio is:

\[ \text{P/E Ratio} = \frac{\text{Share Price}}{\text{Earnings per Share}} \]

Description

The Price/Earnings (P/E) Ratio is a measure that compares the price of a company's stock to its earnings per share. It indicates how much investors are willing to pay for $1 of earnings.

Example Calculation

Let's assume the following:

To calculate the P/E Ratio:

\[ \text{P/E Ratio} = \frac{25.00}{1.80} \approx 13.89 \]

Therefore, the P/E Ratio is approximately 13.89.