P/E Ratio & Valuation Multiples Calculator
How the market prices a share against its earnings, assets and sales.
Implied share price
All the multiples
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the P/E Ratio & Valuation Multiples Calculator
A price multiple says how much the market pays for a share relative to something the company has or earns. The best known is the price-to-earnings ratio (P/E): the share price divided by the earnings per share, trailing (the last twelve months) or forward (next year’s estimate). Its inverse, the earnings yield, compares directly with a bond or deposit rate, and the PEG ratio divides the P/E by the expected growth of earnings, so fast and slow growers can be compared.
Add the market capitalisation and a few figures from the annual report and the calculator also gives P/B (price to book value), P/S (price to sales), the enterprise value and EV/EBITDA and EV/Sales, which compare companies regardless of how much debt they carry. Choose a target multiple — a sector average, say — and it shows the share price that multiple implies and how far it is from today’s. Nothing you enter leaves your browser.
How to use it
- Enter the share price and the earnings per share of the last twelve months. Add the forward EPS for a forward P/E, and the expected yearly EPS growth for the PEG ratio.
- For the other multiples, enter the market cap, total debt, cash, book value (shareholders’ equity), sales and EBITDA — all in the same unit, such as ₹ crore.
- To value the share at a multiple you choose, pick the multiple and enter the target value.
- Read the multiples, the working behind each and the implied price table. Copy the summary or download the table as CSV.
Examples
Share price ₹1,500; EPS ₹60; forward EPS ₹69; expected growth 15% a year
P/E 25× · earnings yield 4% · forward P/E 21.74× · PEG 1.67
Market cap 1,50,000; debt 20,000; cash 8,000; book value 50,000; sales 1,00,000; EBITDA 22,000
EV 1,62,000 · P/B 3× · P/S 1.5× · EV/EBITDA 7.36× · EV/Sales 1.62×
The same company at a P/E of 20, or at an EV/EBITDA of 9
P/E 20: ₹1,200 (−20%) · EV/EBITDA 9: EV 1,98,000 − net debt 12,000 = equity 1,86,000 → ₹1,860 (+24%)
Share price ₹1,500; EPS −₹5
P/E not meaningful · earnings yield −0.33%
A P/E of a loss would be negative and misleading; compare such companies by sales or book value instead.
Common uses
- Check whether a share looks expensive or cheap compared with its peers or its own history.
- Turn a sector-average multiple into a rough target price.
- Compare companies with different amounts of debt using EV/EBITDA.
- Work out a P/E or earnings yield from figures in an annual report or results announcement.
The formulas
- P/E = share price ÷ earnings per share (EPS). Equivalently market cap ÷ net profit.
- Earnings yield = EPS ÷ share price = 1 ÷ P/E. A P/E of 25 is a 4% earnings yield.
- PEG = P/E ÷ expected yearly EPS growth in %. A P/E of 25 with 15% growth is a PEG of 1.67.
- P/B = market cap ÷ book value (shareholders’ equity); P/S = market cap ÷ sales.
- Enterprise value (EV) = market cap + debt − cash: what buying the whole business would cost, debts included. EV/EBITDA and EV/Sales divide it by EBITDA (earnings before interest, tax, depreciation and amortisation) or sales.
- Implied price at a target P/E = target × EPS. For P/B and P/S the price moves in proportion to the market cap; for EV multiples, the implied EV less net debt gives the equity value, and the price moves with it.
These are the price multiples of the CFA Institute’s equity valuation readings. The PEG ratio was popularised by Peter Lynch in One Up on Wall Street, with the rule of thumb that a fairly priced company’s P/E is about equal to its growth rate — a PEG of about 1.
Using multiples well
- Compare like with like: companies in the same industry, on the same basis (trailing with trailing, the same accounting year). A bank and a software company have very different “normal” multiples.
- A low multiple is not automatically cheap: it can reflect slower growth, more risk or one-off profits. A high one can be justified by growth.
- EV multiples see through debt: two companies with the same business but different borrowing have different P/Es, but similar EV/EBITDA.
- Book value matters most for banks and asset-heavy firms; for companies whose value is in brands or software it says little.
- Earnings yield vs bond yield: a share’s earnings yield is not its return, but comparing it with a government bond yield is a quick check on how richly the market is priced.
Limitations
- No market data is built in: the figures and the target multiple are yours. Use consistent figures — the same period, and consolidated or standalone throughout.
- Enterprise value here is market cap + debt − cash. Minority interests, preference capital and investments are not added or subtracted; adjust the debt or cash figure if they matter.
- Forward EPS and growth are estimates; a multiple based on them is only as good as the estimate.
- A multiple is a shortcut, not a valuation of the business: for that, see the intrinsic value calculator.
Privacy
Everything is calculated in your browser. The figures you enter are never uploaded or stored on a server.
Frequently asked questions
How do you calculate the P/E ratio?
Divide the share price by the earnings per share of the last twelve months. A share at ₹1,500 with EPS of ₹60 has a P/E of 25: buyers pay ₹25 for each rupee of yearly profit. With the market cap and the net profit, market cap ÷ net profit gives the same number.
What is a good P/E ratio?
There is no universal good value. It depends on the industry, growth, interest rates and risk. Compare a company’s P/E with similar companies and with its own past; a P/E far above its peers needs faster growth to justify it.
What is the difference between trailing and forward P/E?
Trailing P/E uses the earnings already reported for the last twelve months; forward P/E uses an estimate of the next year’s. A forward P/E below the trailing one means earnings are expected to grow.
What does the PEG ratio tell me?
It adjusts the P/E for growth: P/E ÷ expected EPS growth in %. Peter Lynch’s rule of thumb is that a PEG near 1 is fairly priced, well below 1 attractive and well above 1 expensive. It is only as reliable as the growth estimate, and it is not meaningful for companies with no growth or losses.
Why use EV/EBITDA instead of P/E?
EV/EBITDA values the whole business, including its debt, against earnings before interest, tax and depreciation, so it is not distorted by how the company is financed or by depreciation policies. It is popular for comparing companies with different debt levels and for valuing businesses in takeovers.
Can a P/E ratio be negative?
Mathematically yes, when the company makes a loss, but a negative P/E is not meaningful and is usually shown as “n/m”. The calculator shows the earnings yield instead, which is negative for a loss.