Price/Earnings to Growth Ratio Template
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Price/Earnings to Growth Ratio Template
This price/earnings to growth ratio template shows you the calculation of the PEG ratio given the share price, EPS, and EPS growth rate.
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The PEG ratio is a company’s Price/Earnings ratio divided by its earnings growth rate over a period of time (typically the next 1-3 years). The PEG ratio adjusts the traditional P/E ratio by taking into account the growth rate in earnings per share that are expected in the future. This can help “adjust” companies that have a high growth rate and a high price to earnings ratio.
The PEG ratio formula is as follows:
PEG = Share Price / Earnings per share / Earnings per Share growth rate
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Analyst Certification FMVA® Program
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Additional Questions & Answers
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In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is Financial Modeling?
- How Do You Build a DCF Model?
- What is Sensitivity Analysis?
- How Do You Value a Business?
