Operating PE Ratio

Click the "Learn More" link below to see how we calculate operating earnings yield.

The Operating PE Ratio is the price an investor pays for one dollar of pre-tax operating earnings.

It is similar to a standard PE Ratio, but some investors consider it a better indicator of future earning power than earnings yield since the earnings number excludes tax effects, non-operating income and expenses, discontinued operations, extraordinary items, preferred stock dividends and accounting change differences.

Formula

YCharts calculation: Market Capitalization / TTM Operating Earnings
(None given if TTM Operating Earnings are negative)

Where:

TTM Operating Earnings excludes:
- Earnings from discontinued operations
- Extraordinary items
- Preferred stock dividends
- Accounting changes
- Other non-operating earnings and expenses

Related Terms Total Operating Expense