How to Calculate Forward P/E in CAD from Filings

Data sites quote a forward P/E based on analyst consensus you cannot see inside. Building your own forward EPS from company guidance and the filings shows you which assumptions matter, and gives you something to compare with consensus. It also handles the common TSX issue of companies that report in US dollars.

This post is the forward version of how to calculate P/E in CAD from filings. Read what forward P/E means first if the term is new. It is educational; the example is hypothetical.

Direct answer

Start with the company’s guidance (from the MD&A outlook, earnings release or investor day). Turn it into net income step by step: revenue × margin = operating profit; subtract depreciation and amortization and interest; apply the effective tax rate; divide by diluted shares (adjusted for buybacks or issuance). Convert to CAD if the company reports in USD. Calculate forward P/E at the low, midpoint and high end of guidance, then compare with consensus.

Worked example (hypothetical, company reports in USD)

Line	Source	Midpoint
Revenue	Guidance US$2.0–2.2B	US$2,100M
× EBITDA margin	Guidance 25%	US$525M
− Depreciation and amortization	Last year’s note, adjusted for capex	US$150M
− Interest expense	Debt note × average rate	US$60M
= Pre-tax income		US$315M
− Tax at 26% effective rate	Tax note, last two years	US$82M
= Net income to common	After preferred dividends, if any	US$233M
÷ Diluted shares	Latest diluted count, less planned buybacks	100M
= Forward EPS (USD)		US$2.33
× USD/CAD (hypothetical)	Bank of Canada rate, dated	1.38
= Forward EPS (CAD)		C$3.22
TSX price		C$45.00
Forward P/E	45.00 ÷ 3.22	14.0x

Where each assumption comes from

Assumption	Best source	Common mistake
Revenue or volumes	MD&A outlook, guidance table	Ignoring the guidance range
Margin	Guidance or recent margin trend	Using a peak-year margin
D&A	PP&E and intangibles notes; capex plans	Forgetting acquisition amortization
Interest	Debt note: balances, rates, maturities	Missing refinancing at higher rates
Tax rate	Income tax note (effective rate reconciliation)	Using the statutory rate only
Share count	Diluted shares; buyback (NCIB) or issuance plans	Using basic or period-end shares
Currency	Reporting currency in note 1	Dividing a CAD price by USD EPS

Companies that issue guidance must follow NI 51-102 Part 4A: forward-looking information needs a reasonable basis, the material assumptions must be disclosed, and the company should update it when events change. The assumptions list in the outlook section is often the most useful part.

Building NTM from two fiscal years

If you need next-twelve-months EPS and the company is 4 months into its fiscal year:

Piece	Weight	Example
Current fiscal year (FY1) estimate	8 ÷ 12	2.33 × 0.667 = 1.55
Next fiscal year (FY2) estimate	4 ÷ 12	2.55 × 0.333 = 0.85
NTM EPS (USD)		2.40

Checklist

Step	Done when
Guidance found	Ranges and stated assumptions copied with source and date
Model built	Revenue to EPS in six lines, inputs sourced from notes
Range shown	Low, midpoint and high forward P/E calculated
Currency matched	EPS and price in the same currency
Consensus compared	Your EPS vs consensus; gap explained
Revisit date set	Model updated at the next quarterly report

Go deeper

Compare your number with others’ in forward P/E vs peers, and check the warning signs in when forward P/E misleads on TSX stocks. For multi-year cash flows, see how to build a simple DCF without fake precision.

Related reading

• How to evaluate management guidance language
• How to read capex plans in the MD&A
• How to read share buyback disclosures in Canada
• How to handle currency when analyzing CAD vs USD results

Sources

• NI 51-102 Continuous Disclosure Obligations, Part 4A (forward-looking information and FOFI).
• IAS 33 Earnings per Share; IAS 12 Income Taxes (effective tax rate reconciliation).
• Bank of Canada daily exchange rates.

Media credits

• Hero: “Barometer 20191005 210534.jpg” by Ka23 13, CC BY 4.0, via Wikimedia Commons. Cropped and resized to 1280x720. Real photograph of an aneroid barometer dial, not AI-generated.

By Andrew · stocksummarizer.com