The price earnings to growth ratio formula take into account the price per earnings and the rate of growth of the company to calculate the PEG ratio. It is defined as an investment calculation that measures the value of a stock of a company based on the current earnings and the potential future growth of the company. PEG ratio formula is defined as Price earnings to growth Ratio = P / I where P = Price per earnings; I = Annual Earning Per Share Growth.

Where,

P = Price per Earnings

I = Annual Earning Per Share Growth

The PEG ratio formula is used to measure the value of a stock of a company. It’s a way for investors to calculate whether a stock is over or under priced by taking into account, current earnings today and the rate of growth of the company.