## About P/E Ratio Calculator

The P/E Ratio Calculator is used to calculate the P/E ratio (price-to-earnings ratio).

## P/E ratio Definition

The P/E ratio of a stock is a measure of the price paid for a share relative to the annual net income or profit earned by the company per share.

## P/E ratio Calculation

The P/E ratio calculation formula is as follows:

P/E ratio = Price per share / Annual earnings per share

## Example

Stock A is trading at $100 and the earnings per share for the most recent 12-month period is $5, then stock A has a P/E ratio of 20 (100/5).

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