A PEG ratio compares a price-to-earnings ratio with an assumed earnings-growth rate.
PEG Ratio Calculator
Form
Results
Earnings growth
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PEG ratio
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Table of Contents
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What is PEG Ratio?
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How to Use This Calculator
- Enter or select Price per share, Earnings per share (EPS), Retention rate, Return on equity (ROE).
- Check the unit beside each measurement. For a percentage or rate, use the scale and time period stated in the form.
- Choose Calculate, then compare the output with the formula and example below. If you change a value or option, calculate again to update the result.
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Formula Used
P/E = price/EPS; PEG = P/E divided by growth expressed in percentage points
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Variables Explained
| Input | What it means |
|---|---|
| Price per share | The stated purchase or selling amount, in the same currency as the related costs. |
| Earnings per share (EPS) | Earnings available per common share under the selected basic or diluted definition. |
| Retention rate | The stated rate or percentage, entered using the scale and time period shown in the form. |
| Return on equity (ROE) | The shareholder funding or residual ownership value used in the selected ratio. |
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Worked Example
A P/E of 20 with expected growth of 10% gives PEG=2.
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Why Use This Calculator?
Compare the result with the underlying statement, budget or proposed transaction. It is most useful when every amount uses the same reporting period and the same accounting definition.
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Common Mistakes
- A growth input of 10 means ten percent in the usual PEG convention, not 0.10.
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Frequently Asked Questions
Should I use monthly or annual figures?
Use one consistent period for every amount and rate in the relationship. If a form specifies an annual rate or a monthly amount, follow that label rather than mixing time periods.
Does the result include fees and tax?
Only the costs and taxes represented by the inputs and formula are included. A real transaction can include other charges, so compare the estimate with the underlying agreement or statement.
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Sources & References
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