Cash-Adjusted P/E Ratio
This calculator is designed to compute the Cash-Adjusted Price-to-Earnings (P/E) Ratio. Here's a simple guide on how to use it:
Enter the Market Capitalization: Type in the total market value of the company in dollars.
Input Cash & Short-Term Investments: Enter the amount of cash and short-term investments the company currently holds, also in dollars.
Provide the Earnings: Input the company's earnings in dollars. This figure should represent the net income or profit of the company.
(Optional) Interest Income: If applicable, enter any interest income the company has received in dollars. This field is optional and should be used if the company earns significant interest income.
Calculate: Click the "Calculate" button to compute the Cash-Adjusted P/E Ratio. This calculation adjusts the market capitalization by subtracting the cash & short-term investments and adjusts the earnings by subtracting the interest income. The result is a P/E ratio that provides a clearer picture of a company's earnings relative to its market value, excluding the impact of its cash reserves and interest income.
After clicking "Calculate," the result will be displayed directly below the button, indicating the Cash-Adjusted P/E Ratio. If the earnings or interest income values are invalid (for instance, if adjusting earnings by interest income results in a non-positive value), the calculator will display an error message instead of the ratio.