Forward P/E Ratio Template
This forward P/E ratio template helps you find out the forward P/E ratio given the share price and earnings per share of stocks.
This is what the forward P/E ratio template looks like:
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The forward P/E ratio (or forward price-to-earnings ratio) divides the current share price of a company by the estimated future (“forward”) earnings per share (EPS)Earnings Per Share Formula (EPS)EPS is a financial ratio, which divides net earnings available to common shareholders by the average outstanding shares over a certain period of time. The EPS formula indicates a company’s ability to produce net profits for common shareholders. of that company. For valuation purposesValuation MethodsWhen valuing a company as a going concern there are three main valuation methods used: DCF analysis, comparable companies, and precedent transactions. These methods of valuation are used in investment banking, equity research, private equity, corporate development, mergers & acquisitions, leveraged buyouts and finance, a forward P/E ratio is typically considered more relevant than a historical P/E ratio.
The formula to calculate the forward P/E ratio is the same as the regular P/E ratioPrice Earnings RatioThe Price Earnings Ratio (P/E Ratio) is the relationship between a company’s stock price and earnings per share. It gives investors a better sense of the value of a company. The P/E shows the expectations of the market and is the price you must pay per unit of current (or future) earnings formula, however, estimated (or forecasted) earnings per share are used instead of historical figures.
Forward P/E formula:
Forward P/E = Current Share Price / Estimated Future Earnings per Share
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