Stock Ratios Calculator: P/E, P/B, Yield, PEG & D/E

How the stock ratios work

The five ratios all answer one question: what are you paying for, and what are you getting? P/E is price divided by earnings per share — $120.00 ÷ $6.00 is 20.00 — and it says you pay $20.00 for each $1.00 of annual earnings, or about 20 years of current earnings for the whole company. P/B is price divided by book value per share — $120.00 ÷ $40.00 is 3.00 — and it says you pay $3.00 for each $1.00 of net assets on the books. Dividend yield is dividend per share divided by price — $2.40 ÷ $120.00 is 2.00% — and it says the dividend returns 2.00% of the price a year, before any price change. PEG is P/E divided by earnings growth — 20.00 ÷ 10 is 2.00 — and it says the price-to-earnings ratio is twice the growth rate. Debt-to-equity is total debt divided by total equity — $50B ÷ $100B is 0.50 — and it says the company owes 50 cents for each dollar of equity. The ratios only make sense together: a P/E of 20.00 with 10% growth is a PEG of 2.00, while the same P/E with 25% growth is a PEG of 0.80.

The worked example, line by line

Setup: share price $120.00, EPS $6.00, book value per share $40.00, dividend per share $2.40, earnings growth 10% a year, total debt $50B, total equity $100B.

Line 1 — P/E. $120.00 ÷ $6.00 = 20.00.

Line 2 — P/B. $120.00 ÷ $40.00 = 3.00.

Line 3 — dividend yield. $2.40 ÷ $120.00 = 2.00%.

Line 4 — PEG. 20.00 ÷ 10 = 2.00.

Line 5 — debt-to-equity. $50B ÷ $100B = 0.50.

Branch — value stock: P/E $45.00 ÷ $5.00 = 9.00; P/B $45.00 ÷ $30.00 = 1.50; yield $1.80 ÷ $45.00 = 4.00%; PEG 9.00 ÷ 5 = 1.80; D/E $30B ÷ $100B = 0.30.

Branch — growth stock: P/E $350.00 ÷ $7.00 = 50.00; P/B $350.00 ÷ $25.00 = 14.00; yield $0.00 ÷ $350.00 = 0.00%; PEG 50.00 ÷ 25 = 2.00; D/E $20B ÷ $100B = 0.20.

Branch — dividend stock: P/E $80.00 ÷ $4.80 = 16.67; P/B $80.00 ÷ $20.00 = 4.00; yield $3.20 ÷ $80.00 = 4.00%; PEG 16.67 ÷ 4 = 4.17; D/E $80B ÷ $100B = 0.80.

Branch — distressed: P/E is n/a — earnings are -$1.50, and a negative P/E is not a valuation; P/B $12.00 ÷ $8.00 = 1.50; yield 0.00%; PEG is n/a — growth is -5%; D/E $250B ÷ $100B = 2.50.

Stock ratios by company type

The table shows why no single ratio is a verdict. The growth stock's P/E of 50.00 looks expensive until you see the PEG of 2.00 — the same PEG as the default company at a P/E of 20.00 — because the growth stock earns its multiple with 25% growth. The dividend stock's PEG of 4.17 looks expensive, but it pays 4.00% a year in cash while you wait. The value stock's P/E of 9.00 and PEG of 1.80 look cheap, but the growth is only 5% — the market may be right. And the distressed company's P/B of 1.50 looks like a bargain until you see the D/E of 2.50 and the negative earnings: the book value may not survive the debt. Compare each ratio against the same company's history and against its peers, never against an absolute number.

Rounding convention, stated plainly: all five ratios are shown to two decimals, and the PEG is computed from the unrounded P/E divided by the growth rate — so the dividend stock's PEG is 16.6667 divided by 4, which is 4.17, not 16.67 divided by 4. A P/E of 0 or negative shows as n/a, never as a number; the same goes for P/B with a book value of 0 or negative, and PEG with growth of 0 or negative. A dividend of $0 is a real 0.00% yield, not n/a.

Output · formula · meaning

Who uses this

• The value hunter: finds a stock at $45.00 with EPS of $5.00 and learns the P/E is 9.00, the P/B is 1.50, and the yield is 4.00% — and that the PEG of 1.80 means the market is pricing in only 5% growth, so the question is whether the market is wrong.
• The growth investor: looks at a $350.00 stock with a P/E of 50.00 and learns the PEG is 2.00 — the same as the default company at a P/E of 20.00 — because 25% growth earns the multiple, and the P/B of 14.00 says the market is paying for ideas, not assets.
• The income investor: finds a stock paying $3.20 a year on an $80.00 price and learns the yield is 4.00% — but the PEG of 4.17 says the price has already run ahead of the 4% growth, so the income is real and the growth is priced in.
• The distress checker: sees a $12.00 stock with negative earnings and learns the P/E is n/a — not a bargain, just unmeasurable — while the D/E of 2.50 and the P/B of 1.50 say the book value may not survive the debt.

Accuracy & limitations

The math is exact for the numbers you enter: P/E is price over EPS, P/B is price over book value per share, yield is DPS over price, PEG is P/E over growth, and D/E is debt over equity. But the inputs carry the assumptions. EPS should be the last twelve months' earnings, not a single quarter annualized — a one-off gain or loss in one quarter distorts the whole ratio. Book value is an accounting number, not a market one: it counts factories at cost minus depreciation, and it counts nothing for a brand, a patent, or a network — which is why a software company's P/B of 14.00 can be fair and a steel mill's P/B of 1.50 can be a trap. PEG is the roughest of the five: it divides a price ratio by a growth forecast, and the forecast is a guess — PEG under 1 is often called cheap and over 2 often called pricey, as a rule of thumb, not a rule. A PEG of 2.00 with 10% growth is not the same as a PEG of 2.00 with 25% growth, because the growth itself is less certain at 25%. Debt-to-equity uses book debt and book equity; a company with off-balance-sheet leases looks safer than it is. Compare these ratios inside one industry and over time, never across industries: a bank at a P/E of 9.00 and a software company at a P/E of 50.00 can both be fairly priced. This completes the ratios cluster — liquidity, profitability, and operations ratios each have their own calculator on this site, and stock ratios finish the set. This is an educational tool, not financial advice.