Calculating your P/E ratio is straightforward once you know the Price to Earnings Ratio formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Price to Earnings Ratio Calculator.
What is Price to Earnings Ratio?
The Price to Earnings Ratio calculation tells you your P/E ratio from a few simple inputs. The figure you are solving for here is the P/E ratio.
The Price to Earnings Ratio formula
The core formula is:
P/E ratio = Share price ÷ Earnings per share (EPS)Here is what each input means:
- Share price — a money amount. Example: ₹100.
- Earnings per share (EPS) — a money amount. Example: ₹5.
How to calculate it step by step
- Write down the share price (for example, ₹100).
- Write down the earnings per share (eps) (for example, ₹5).
- Apply the formula above to get your P/E ratio.
- Double-check the result with the Price to Earnings Ratio Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Share price | ₹100 |
| Earnings per share (EPS) | ₹5 |
| P/E ratio | 20.00 |
| Earnings yield | 5.00% |
With share price of ₹100 and earnings per share (eps) of ₹5, the P/E ratio works out to 20.00.
Example 2
With share price of ₹200 and earnings per share (eps) of ₹5, the P/E ratio works out to 40.00.
| Result | Value |
|---|---|
| P/E ratio | 40.00 |
| Earnings yield | 2.50% |
Example 3
With share price of ₹50 and earnings per share (eps) of ₹5, the P/E ratio works out to 10.00.
| Result | Value |
|---|---|
| P/E ratio | 10.00 |
| Earnings yield | 10.00% |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Price to Earnings Ratio Calculator does it instantly, for free, with the formula and a worked example built in.
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