PE ratio calculator with Graham number and other valuation ratios
The price-to-earnings ratio is the most quoted number in stock investing: how many rupees or dollars you pay for one rupee or dollar of a company’s yearly profit. This PE ratio calculator works it out from the share price and earnings per share — or from the company’s net profit and share count — and adds the ratios that usually sit next to it: earnings yield, price-to-book, forward P/E, PEG, dividend yield and payout.
It also gives three simple valuation yardsticks: Benjamin Graham’s number, √(22.5 × EPS × book value per share); his growth formula; and the price the share would have at any P/E you choose — which answers the common question of how to calculate a stock price from a P/E ratio. Everything is shown with its formula. These are screening numbers for research, not fair values.
How to use the PE Ratio & Valuation Calculator
- Choose Per-share figures if you have EPS and book value per share, or Company totals to enter net profit, shares outstanding and equity.
- Enter the share price and the earnings (last twelve months; negative for a loss).
- Add book value and dividends if you have them.
- Under Growth and valuation inputs, enter forward EPS, expected growth, today’s AAA bond yield and a target P/E.
- Read the P/E, the ratios and the valuation table, and copy the result.
PE Ratio & Valuation Calculator features
P/E from either side
Per-share EPS, or EPS built from net profit, preference dividends and shares outstanding.
The usual companion ratios
Earnings yield, P/B, forward P/E, PEG, dividend yield and payout ratio.
Graham number and formula
√(22.5 × EPS × BVPS) and EPS × (8.5 + 2g) × 4.4 ÷ Y, with the margin to today’s price.
Price at a target P/E
Target P/E × EPS, to see what a re-rating would mean.
Honest about losses
Loss-making companies get an earnings yield instead of a meaningless negative P/E.
Formulas
EPS = (net profit − preference dividends) ÷ shares outstandingP/E = price ÷ EPS; earnings yield = EPS ÷ price (the P/E turned upside down, comparable with bond yields)P/B = price ÷ book value per share, where book value per share = shareholders’ equity ÷ sharesPEG = P/E ÷ expected EPS growth (% a year)Graham number = √(22.5 × EPS × BVPS)— from Graham’s tests for the defensive investor in The Intelligent Investor: P/E no more than 15 and P/B no more than 1.5, or a product of the two no more than 22.5Graham formula V = EPS × (8.5 + 2g) × 4.4 ÷ Y— 8.5 is his P/E for a no-growth company, g the expected growth rate, and 4.4 ÷ Y adjusts for today’s AAA bond yield Y (his 1974 revision)
Worked example
A share at ₹1,450 with EPS of ₹62.50 has a P/E of 23.2 and an earnings yield of 4.31%. With book value of ₹410 a share, P/B is 3.54. The Graham number is √(22.5 × 62.5 × 410) = ₹759.32, so the price is well above Graham’s defensive limit (P/E × P/B = 82 against his 22.5). At 12% expected growth and a 7.2% AAA yield, the Graham formula gives 62.5 × (8.5 + 24) × 4.4 ÷ 7.2 = ₹1,241.32, and at a P/E of 20 the share would be worth ₹1,250. A dividend of ₹18 is a 1.24% yield and a 28.8% payout.
For a cash-flow-based value, use the DCF calculator; for income, the dividend calculator; and to check what you made on a trade, the stock profit calculator.
Reading the numbers
- Compare P/E within a sector and against the company’s own history; banks, software firms and utilities trade on very different multiples.
- A low P/E can mean a bargain or a business in trouble; a high one can mean growth or hype. Look at why.
- Use consistent figures: trailing twelve-month EPS for the trailing P/E, consolidated numbers for groups, and diluted EPS when there are many options or convertibles.
- Graham designed his numbers for large, stable, profitable companies; they reject most growth companies by design.
PE Ratio & Valuation Calculator FAQ
How do you calculate the PE ratio?
Divide the share price by earnings per share. A ₹1,450 share with EPS of ₹62.50 has a P/E of 23.2. The PE ratio calculator also works out EPS from net profit and shares outstanding.
How do I calculate a stock price from a P/E ratio?
Multiply the P/E by EPS. At a P/E of 20 and EPS of ₹62.50 the price would be ₹1,250. Enter your target P/E under Growth and valuation inputs.
What is the Graham number?
The square root of 22.5 × EPS × book value per share — the highest price Graham’s defensive investor would pay. It assumes positive earnings and book value.
What is a good P/E ratio?
There is no universal good value. It depends on the sector, growth, interest rates and the market. Compare with peers and with the company’s own history.
What is the PEG ratio?
P/E divided by the expected yearly earnings growth in per cent. A PEG near 1 is often read as growth roughly matching the price, but it is only as good as the growth forecast.
Is this investment advice?
No. It gives calculations only. Markets carry risk; do your own research or consult a registered adviser.