Understanding the PE ratio is crucial for any investor. But did you know that you can calculate the PE ratio directly in Google Sheets using the GOOGLEFINANCE function? Let’s go through it.
What is the PE Ratio?
The PE ratio, or price to earning ratio, is a financial metric that helps investors understand the market value of a stock compared to the earnings of the company. Essentially, the PE ratio gives you an indication of how much you are paying for USD 1.00 of a company’s earnings.
How does GOOGLEFINANCE Calculate PE Ratio?
The GOOGLEFINANCE function takes data directly from Google Finance, including the PE ratio. It calculates the ratio by dividing the market value per share (the share price) by the earnings per share (EPS).
How to Use the GOOGLEFINANCE Formula in Google Sheets to Calculate PE Ratio?
The GOOGLEFINANCE function makes it easy to calculate the PE ratio of a stock in Google Sheets. Here is how you can do it:
Open a new Google Sheets and list the stock tickers of the companies from which you want the PE ratios
Enter the formula: =GOOGLEFINANCE(
Enter the ticker of your desired stock =GOOGLEFINANCE(“AAPL”
Enter “pe” to indicate that you want the PE ratio =GOOGLEFINANCE(“AAPL”, “pe”)
Sample Google Sheets PE Ratio Calculation
Here's a sample calculation using 10 well-known companies:
Here is the formula used in the example:
=GOOGLEFINANCE(B5,"pe")Check out the video of how to do this here.
Remember, with Google Sheets finance functions, you can easily track and analyze your investments in real-time. By learning how to calculate PE ratio in Google Sheets, you are adding another powerful tool to your investment analysis toolkit.
The versatility of Google Sheets extends far beyond traditional spreadsheets, especially when it comes to financial analysis. Once you've mastered the GOOGLEFINANCE function and its uses, like calculating PE ratios, there's so much more you can explore and create!
Copy paste the spreadsheet by clicking here.