Quick answer
This calculator divides a share price by earnings per share over the last 12 months to give the P/E ratio, and shows the reverse — EPS as a percentage of price, the earnings yield. When earnings are zero or negative, P/E is shown as not meaningful [1].
Key points
- P/E = share price ÷ earnings per share (EPS) for the last 12 months.
- Earnings yield = EPS ÷ share price, shown as a percentage. It is the P/E turned upside down.
- A P/E of 20 means investors are paying $20 for each $1 of yearly earnings.
- If EPS is zero or negative, the P/E is not meaningful and the tool says so.
- P/E ratios differ a lot between industries, so compare like with like.
#What does the P/E ratio tell you?
Investor.gov describes the price-earnings ratio as "a way of gauging whether the stock price is high or low compared to the past or to other companies" [1]. It links two numbers: what the market charges for one share, and how much profit the company earned for each share.
The calculator has two inputs: Share price and Earnings per share, last 12 months. Earnings per share (EPS) is "A public company's net profit divided by the number of its common shares" [2]. You can find EPS in a company's quarterly and annual reports — see how to read financial statements. The tool returns the P/E ratio and the earnings yield.
#How does the calculation work?
- P/E ratio = share price ÷ EPS (last 12 months).
- Earnings yield (%) = EPS ÷ share price × 100.
- If EPS is zero or negative, the P/E is shown as not meaningful. A company with no profit has no positive multiple to report.
Investor.gov gives the same method: divide the current price by earnings per share, where EPS uses the earnings for the past 12 months [1]. This is often called a trailing P/E because it looks back at reported earnings, not at analyst estimates.
Worked example
Worked example: a $120 share
Share price $120 · Earnings per share over the last 12 months $6. Calculated in Python with the formulas above.
- P/E ratio ($120 ÷ $6)
- 20.0
- Earnings yield ($6 ÷ $120 × 100)
- 5.00%
- Same price, EPS $4.80: P/E
- 25.0
- Price $30, EPS −$1.50: P/E
- not meaningful
At $120 with $6 of yearly earnings per share, the stock trades at 20 times earnings — an earnings yield of 5%.
Hypothetical companies. A ratio describes today's price relative to past earnings; it is not a forecast.
| Share price | P/E ratio | Earnings yield |
|---|---|---|
| $90 | 15.0 | 6.67% |
| $120 | 20.0 | 5.00% |
| $150 | 25.0 | 4.00% |
#How should you compare P/E ratios?
FINRA advises checking how a ratio compares with the market as a whole and with the company's industry, "since there can be significant variation in the average ratio across industries" [3]. A fast-growing software firm and a utility can have very different typical P/Es for reasons that have nothing to do with being cheap or expensive. Comparing a company's P/E with its own past can also help.
Two ways to read the same numbers
P/E ratio
- Price ÷ EPS
- Dollars paid per $1 of earnings
- Higher = market pays more for each $1 of profit
Earnings yield
- EPS ÷ price
- Earnings per $100 invested, as %
- Easier to set beside a bond yield or interest rate
#What this calculator leaves out
- Why the ratio is high or low. Expected growth, debt, risk and one-off gains or losses all affect P/E. The tool cannot tell which one is at work.
- One-off items in EPS. A single asset sale or write-down can swing 12-month earnings and make the P/E misleading.
- Forward estimates. The tool uses past earnings only; forward P/Es based on forecasts are a different measure.
- Losses. For companies with zero or negative earnings, P/E gives no usable number at all.
What's the bottom line?
The P/E ratio is one division: price over the last 12 months of earnings per share. This calculator does that division, flips it into an earnings yield, and refuses to give a number when earnings are not positive. The harder part is interpretation — compare within an industry and read the article on the price-to-earnings ratio before drawing conclusions.
Frequently asked questions
What is a good P/E ratio?
There is no single good number. Typical ratios vary widely by industry and over time, so a P/E only means something next to comparable companies or the company's own history.
Why does the calculator say not meaningful?
Because EPS is zero or negative. Dividing a price by a loss gives a negative or undefined number that does not describe value in any useful way.
Where do I find earnings per share?
In a public company's annual and quarterly reports. Add up the last four quarters of EPS to get a trailing 12-month figure.
What is earnings yield used for?
It expresses earnings as a percentage of the price, so it can sit next to other percentages such as bond yields. It is simply 1 divided by the P/E, times 100.
Sources
Grade A = primary source (regulator, government agency, official rulebook or the index provider's own documents). Numbers in brackets in the text point here.
- U.S. SEC — Investor.gov. Price-earnings (P/E) Ratio (glossary) (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. Earnings Per Share (glossary) (2026). Accessed 2026-10-03.A
- FINRA. Evaluating Stocks (2026). Accessed 2026-10-03.A
This page is general education, not personal financial, tax or legal advice. Figures in worked examples are hypothetical and calculated before taxes and fees unless stated. Rules and limits change; check the linked primary sources for the current version. How we check every page.
