i What this calculator does
The price-to-earnings ratio is the most quoted number in equity investing: what you pay for each rand of annual profit. A P/E of 12 means the price is twelve times the company's yearly earnings per share.
It is a comparison tool rather than a verdict. A low P/E can mean a bargain or a business in decline, and the only way to tell is to compare against the sector, the company's own history, and why the market has priced it where it has.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the P/E Ratio Calculator
Every field has a working default, so the calculator produces a result the moment the page loads. Replace the defaults with your own figures and the output updates when you press the button.
- 1. Share Price (R)
- 2. Earnings Per Share (R) Annual EPS, trailing or forward
- 3. Sector Average P/E For comparison; JSE sectors vary widely
- 4. Expected Earnings Growth (%) Used for the PEG ratio
The result panel reports:
- P/E Ratio Rand paid per rand of earnings
- Earnings Yield The P/E inverted
- PEG Ratio P/E divided by growth
Alongside the headline figures, the calculator reports share price, earnings per share, sector average, vs sector. Those are the numbers that usually explain why the headline result came out where it did.
The breakdown below the result shows every step of the arithmetic, so you can check the figure rather than trust it. The formula panel names each input as it is used, which is useful if you want to reproduce the calculation in a spreadsheet.
Frequently asked questions
What is a good P/E ratio?
There is no universal figure. It depends on the sector, the growth rate and interest rates. JSE resource companies often trade on single-digit P/Es because earnings are cyclical, while consumer and technology companies command higher multiples. Compare against the sector rather than against a rule of thumb.
What is the difference between trailing and forward P/E?
Trailing uses the last twelve months of reported earnings, which are known. Forward uses analyst estimates for the next twelve months, which are not. Trailing is factual and backward looking; forward is relevant but unreliable. Most quoted figures are trailing unless labelled otherwise.
Why does a low P/E not always mean cheap?
The market prices in expectations. A company on a P/E of 5 may be facing a structural decline, a legal problem or a cyclical peak in earnings that is about to reverse. The ratio tells you what is being paid, not whether it should be.
Does the P/E work for loss-making companies?
No. With zero or negative earnings the ratio is meaningless, which is why this calculator says so rather than printing a number. Price to sales or price to book are the usual substitutes.
How does the P/E relate to interest rates?
Inversely, in general. When cash pays more, future earnings are discounted more heavily and multiples tend to compress. With the repo rate at 7.25% after the September 2026 increase, the hurdle for equity valuations is higher than it was.
What is the earnings yield?
The P/E turned upside down: earnings divided by price, expressed as a percentage. It is useful because it can be compared directly against a bond yield or a fixed deposit rate, which a P/E cannot.
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