Price-to-Earnings Multiple CalculatorFree online financial calculator — instant results, no sign-up
Calculate the price-to-earnings ratio and earnings yield for positive per-share earnings.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
Sign in to save results and favorites.
About the Price-to-Earnings Multiple Calculator
The Price-to-Earnings Multiple Calculator divides a stock’s share price by its positive annual earnings per share to calculate its price-to-earnings (P/E) ratio. It also expresses earnings per share as a percentage of the share price, called earnings yield. With a share price of $90 and annual earnings per share of $5, the results are a P/E ratio of 18 and an earnings yield of 5.56%.
- Share price ($)
- The stock’s market price for one share, in dollars, with a default value of $90.
- Annual earnings per share ($)
- The company’s positive earnings attributable to each share over a year, in dollars per share, with a default value of $5.
Formula and method
PE = P / E; Y = (E / P) × 100. With the default inputs: PE = 90 / 5 = 18; Y = (5 / 90) × 100 ≈ 5.56%.
- PShare price in dollars per share; must be greater than zero for these outputs to be meaningful.
- EAnnual earnings per share in dollars per share; must be greater than zero.
- PEPrice-to-earnings ratio, a unitless multiple commonly displayed with an × suffix.
- YEarnings yield expressed as a percentage of the share price.
Use a positive share price and positive annual earnings per share measured in the same currency and on a consistent per-share basis. Divide share price by annual earnings per share to obtain the P/E multiple, then divide annual earnings per share by share price and multiply by 100 to obtain earnings yield. Round the displayed earnings yield to two decimal places, giving 18 and 5.56% for the default inputs.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Share price90 $
- Annual earnings per share5 $
Results
- Price-to-earnings ratio18
- Earnings yield5.56%
How to use the Price-to-Earnings Multiple Calculator
- 1Enter the share price in dollars, or keep the default of $90.
- 2Enter positive annual earnings per share in dollars, or keep the default of $5.
- 3Check whether your earnings figure is trailing or forecast annual earnings and ensure it is consistent with the share price’s per-share basis.
- 4Calculate the outputs: $90 divided by $5 gives a P/E ratio of 18, and $5 divided by $90 multiplied by 100 gives an earnings yield of 5.56%.
- 5Read both results together and compare them only with valuations using comparable earnings definitions and periods.
Reading your result
The price-to-earnings ratio row shows how much investors pay per dollar of annual earnings: 18 means the share price is 18 times annual earnings per share, or $18 for each $1 of annual earnings. The earnings yield row shows annual earnings per share relative to the purchase price: 5.56% means the annual earnings figure equals approximately 5.56% of the $90 share price. For positive inputs, a higher P/E corresponds to a lower earnings yield. Neither output alone establishes whether a stock is attractively priced.
Limitations
This tool is intended for positive annual earnings per share and a positive share price. Zero earnings make P/E undefined, negative earnings fall outside the tool’s intended scope, and a zero share price makes earnings yield undefined. Results depend on whether earnings are trailing or forecast, basic or diluted, and reported or adjusted; unusual gains or losses can distort comparisons. Price and earnings must use the same currency and consistent stock-split adjustments. The calculation does not account for growth, debt, risk, cash flow, or differences across industries. Earnings yield is not a dividend yield or a promised investment return, and the P/E multiple is not a guaranteed payback period.
Common questions
Why do the default inputs produce a P/E ratio of 18 and an earnings yield of 5.56%?+
Dividing the $90 share price by $5 in annual earnings per share gives 18. Reversing the division and multiplying by 100 gives (5 / 90) × 100 = 5.555…%, which rounds to 5.56%.
Should I enter trailing earnings or forecast earnings per share?+
Either can be used if it represents a full year of positive earnings. Trailing earnings produce a trailing P/E, while forecast earnings produce a forward P/E. Keep the basis consistent when comparing stocks, since forecasts are uncertain and can change.
Can I use this calculator when annual earnings per share are zero or negative?+
No. The tool is designed for positive annual earnings per share. With zero earnings, division by earnings makes P/E undefined; negative earnings produce a negative multiple that is not comparable to the positive P/E ratios this tool is intended to explain.
Does a 5.56% earnings yield mean I receive 5.56% in cash each year?+
No. Earnings yield compares company earnings per share with the share price, not cash paid to shareholders. The company may retain earnings rather than distribute them, and your investment return also depends on dividends and changes in the share price.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
You might also like
Interest Calculator
Growth of savings with compound interest and regular deposits.
Investment Calculator
Project an investment with monthly contributions.
Finance Calculator
Solve for future value from present value, rate, periods and payment.
Compound Interest Calculator
Compare compounding frequencies and see the effective rate.
Interest Rate Calculator
Find the rate on a loan from amount, payment and term.
Savings Calculator
How savings grow with deposits, interest and tax.
Results are estimates for informational purposes and are not financial, medical or legal advice.