What is the formula for the P/E ratio?

P/E ratio = share price ÷ earnings per share (EPS). For a $200 share price and $8 EPS, the P/E is 25, meaning investors pay $25 for each $1 of annual earnings.

Should I use basic or diluted EPS for the P/E?

Use diluted EPS. It assumes options and convertible securities are exercised, giving a larger share count and a more conservative (slightly higher) P/E. Companies report both lines on the income statement of the 10-K.

What is trailing vs forward P/E?

Trailing P/E uses the last reported (historical) EPS from filings. Forward P/E uses an estimate of next year's EPS. Filings give you the trailing figure; the forward figure depends on analyst forecasts, which can be wrong.

How to calculate the P/E ratio from a company's filings

The price-to-earnings ratio is the most quoted valuation metric in investing, and it is built from just two numbers — one of which comes directly from a company’s filings.

The answer first

P/E ratio = share price ÷ earnings per share (EPS). The share price you read off any quote; the EPS you take from the income statement in the 10-K. Use the diluted EPS line for consistency. The result tells you how many dollars the market pays for each dollar of annual earnings. Try the P/E ratio calculator to do it instantly.

Step 1: find EPS in the filing

Every 10-K income statement reports two EPS lines near the bottom: basic and diluted. Diluted EPS divides net income (less preferred dividends) by a share count that assumes options and convertibles are exercised — it is the more conservative number, so analysts default to it. Here are diluted EPS figures from recent filings:

Company (latest FY)	Diluted EPS	Source
Microsoft (MSFT)	$13.64	MSFT page
Apple (AAPL)	$7.46	AAPL page
Alphabet (GOOGL)	$10.81	GOOGL page

To understand how that figure is built, read the EPS calculator and the explainer it links to.

Step 2: divide the price by EPS

Suppose Apple trades at $230 and reported $7.46 diluted EPS:

P/E = 230 ÷ 7.46 ≈ 30.8

A P/E of about 31 means the market is paying roughly $31 for each $1 of Apple’s annual earnings. Do the same for any stock with the P/E calculator.

Step 3: put the number in context

A P/E in isolation tells you little. What matters is the comparison:

Versus the company’s own history — is it cheaper or dearer than usual?
Versus industry peers — a 30× P/E is normal for fast-growing tech and expensive for a utility.
Versus growth — a higher P/E can be justified by faster expected earnings growth.

P/E also breaks down when EPS is zero or negative: a loss-making company has no meaningful P/E. Intel, for example, reported negative EPS in its latest year, so a trailing P/E would not apply.

Trailing vs forward

Filings give you trailing EPS (what actually happened). Forward P/E uses an estimate of next year’s EPS, which is a forecast, not a fact. This site only publishes reported figures from filings, so any P/E you build here is a trailing one.

Keep reading

For the building block, see the EPS calculator; for the bigger picture of profitability, see gross vs operating vs net margin.

Figures here are factual data compiled from SEC filings — not investment advice; figures may contain errors or lag the original filing; verify on SEC EDGAR before relying on them.