💹 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.