Fidamen

Price to Earnings (P/E) Ratio Calculator

This calculator computes the Price-to-Earnings (P/E) ratio using multiple commonly used methods: dividing market price per share by trailing EPS, diluted EPS, forward EPS, or by deriving EPS from net income and shares outstanding. Choose the method that matches the data you have and your analysis purpose.

P/E is a dimensionless multiple that indicates how much investors are willing to pay per unit of reported earnings. It is meaningful only when earnings are positive and measured on a consistent basis (same currency, same share-count basis).

Updated Nov 8, 2025QA PASS — golden 25 / edge 120Run golden-edge-2026-01-23

Governance

Record fb954179d930 • Reviewed by Fidamen Standards Committee

Standard P/E calculated by dividing current market price per share by trailing earnings per share (EPS, typically TTM). Use when reliable EPS per share is available.

Inputs

Results

Updates as you type

P/E (Trailing)

20

OutputValueUnit
P/E (Trailing)20—
Primary result20

Visualization

Methodology

We provide four distinct computation workflows because financial statements and analyst data can present earnings differently. Selecting the wrong EPS base (basic vs diluted, trailing vs forward, per-share vs derived) leads to inconsistent comparisons.

Calculations assume inputs are in the same currency and that shares outstanding reflect the same dilution basis as the EPS input. When EPS is unavailable, deriving EPS from net income and diluted shares outstanding offers a reproducible alternative.

Worked examples

Example 1: Market price = 50, Trailing EPS = 2.5 → P/E (Trailing) = 50 / 2.5 = 20.00

Example 2: Market price = 50, Net income = 1,000,000, Shares outstanding = 100,000 → Derived EPS = 10.00, P/E = 50 / 10 = 5.00

F.A.Q.

What if EPS is negative or zero?

If EPS is zero the P/E is undefined. If EPS is negative, the P/E is not meaningful as a positive multiple; we report the computed value but flag that negative earnings make standard P/E comparisons unreliable. Consider alternative metrics such as price-to-sales, EV/EBITDA, or analyzing the causes of negative earnings.

Which EPS should I use: basic, diluted, trailing, or forward?

Use the EPS series that matches your analysis goal. Trailing EPS is objective and based on reported results. Diluted EPS accounts for potential share dilution and is conservative. Forward EPS reflects expectations but depends on forecast accuracy. Always ensure consistency across comparisons.

Do currency and share-count differences matter?

Yes. Inputs must be in the same currency and shares outstanding should match the EPS basis (basic vs diluted). Mismatched bases create incorrect P/E results.

How accurate are these calculations?

The arithmetic is straightforward; however, input accuracy, rounding, and floating-point representation affect displayed results. We follow numeric handling guidance consistent with IEEE floating-point best practices and recommend verifying material calculations against audited figures.

Are there regulatory or standards considerations?

This tool provides calculations only and is not a substitute for financial advice. Users should follow accounting standards and disclosures applicable in their jurisdiction and verify non-GAAP adjustments. See listed standards for guidance on software quality and numeric handling.

Sources & citations

Further resources

Versioning & Change Control

Audit record (versions, QA runs, reviewer sign-off, and evidence).

Record ID: fb954179d930

What changed (latest)

v1.0.0 • 2025-11-08 • MINOR

Initial publication and governance baseline.

Why: Published with reviewed formulas, unit definitions, and UX controls.

Public QA status

PASS — golden 25 + edge 120

Last run: 2026-01-23 • Run: golden-edge-2026-01-23

Engine

v1.0.0

Data

Baseline (no external datasets)

Content

v1.0.0

UI

v1.0.0

Governance

Last updated: Nov 8, 2025

Reviewed by: Fidamen Standards Committee (Review board)

Credentials: Internal QA

Risk level: low

Reviewer profile (entity)

Fidamen Standards Committee

Review board

Internal QA

Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person

Semantic versioning

  • MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
  • MINOR: New features or fields that do not change existing outputs for the same inputs.
  • PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.

Review protocol

  • Verify formulas and unit definitions against primary standards or datasets.
  • Run golden-case regression suite and edge-case suite.
  • Record reviewer sign-off with credentials and scope.
  • Document assumptions, limitations, and jurisdiction applicability.

Assumptions & limitations

  • Uses exact unit definitions from the Fidamen conversion library.
  • Internal calculations use double precision; display rounding follows the unit's configured decimal places.
  • Not a substitute for calibrated instruments in regulated contexts.
  • Jurisdiction-specific rules may require official guidance.

Change log

v1.0.0 • 2025-11-08 • MINOR

Initial publication and governance baseline.

Why: Published with reviewed formulas, unit definitions, and UX controls.

Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 982a05390d7b