💹 Valuation Ratios Calculator
Enter share price, shares and financials to get the P/E, P/B, P/S, EPS, dividend yield, payout ratio and EV/EBITDA — each explained in plain terms.
Each share earns $5 of net profit. On its own it says little — compare over time and against the share price (P/E).
Investors pay $10 for every $1 of annual earnings. A high P/E signals high growth expectations (or overvaluation); a low one can mean a bargain or a troubled business. P/E is only meaningful against the sector and the market.
The market values the company at 1.25× its accounting book value. Below 1× can flag undervaluation (or trouble); a premium reflects intangibles and growth the balance sheet doesn't capture. Sector-dependent.
The company is valued at 0.5× its annual revenue — useful for firms with little or no profit yet. Compare within the sector.
Shareholders receive 4% of the share price in dividends each year. A higher yield means more income, but an unusually high yield can signal a falling price or an unsustainable payout.
40% of earnings are paid out as dividends, leaving 60% reinvested in the business. Lower suits growth companies; higher suits mature income stocks.
The whole business (equity + net debt) is valued at 5× its operating cash earnings. A capital-structure-neutral valuation multiple — lower can mean cheaper, but it's highly sector-dependent.
Valuation (market) ratios relate a company’s share price to its earnings, book value, sales and cash flow — telling you how expensive the stock is. They only mean something versus sector peers, the company’s own history and its growth rate: a P/E of 30 is cheap for a fast grower and dear for a utility. Enterprise value = market cap + net debt. Educational information, not financial or investment advice. 🔒 In your browser.
How the valuation ratios calculator works
Valuation (market) ratios relate a company's share price and enterprise value to its earnings, book value, sales and cash flow, telling you how expensive the stock is. The tool computes EPS, P/E (price ÷ EPS), P/B (price ÷ book value per share), P/S (market cap ÷ revenue), dividend yield, the payout ratio and EV/EBITDA — and interprets each.
Valuation multiples only mean something in context — versus sector peers, the company's own history and its growth rate. A P/E of 30 is cheap for a fast grower and expensive for a utility, so the tool interprets the meaning rather than declaring a number good or bad. One hard signal it does flag: a dividend payout ratio above 100% is unsustainable. Educational information, not investment advice.
Frequently asked questions
What is a good P/E ratio?
There isn't a universal one — the market has historically averaged roughly 15–25, growth stocks trade far higher and value stocks lower. A high P/E reflects high growth expectations or overvaluation; it's only meaningful compared to sector peers, history and the growth rate.
What does the P/B ratio tell me?
Price ÷ book value per share — how the market values the company relative to its accounting net worth. Below 1 can flag undervaluation or underlying asset problems; a premium reflects intangibles and growth the balance sheet doesn't capture. Most useful for asset-heavy and financial firms.
What is a sustainable dividend payout ratio?
Dividends ÷ net income. Mature income companies may pay out 50–80%; growth firms little or nothing. Above 100% is unsustainable — the company is paying out more than it earns, dipping into reserves or debt to do so.
Why is EV/EBITDA used instead of P/E?
Enterprise value ÷ EBITDA is capital-structure-neutral — it includes debt and ignores it in the denominator — so it compares companies with different debt levels and tax situations better than P/E. Below about 10 is often seen as reasonable, but it's sector-dependent.
What is enterprise value?
Market capitalisation plus net debt (total debt minus cash) — the theoretical cost to buy the whole business, not just its equity. It's the numerator in EV/EBITDA and gives a fuller valuation than share price alone. Enter it directly in the tool.
Educational information, not financial advice. These calculators use standard formulas with the figures you enter; results are illustrations, not guarantees. For decisions about your money, consult a qualified, regulated financial professional.