What does P/E ratio mean? Many novice investors have no concept of P/E ratio. In fact, P/E ratio is an important valuation indicator of stocks. We can judge whether the stock is worth investing by P/E ratio. Here is a popular explanation of P/E ratio so that you can understand the concept of P/E ratio.
P/E ratio is the most commonly used and important valuation indicator. The P/E ratio is called PE for short, which is the most commonly used valuation indicator. P/E ratio is to measure the value of stocks from the perspective of profitability. It can measure the relationship between the market value of enterprises and the profitability of a certain year.
P/E ratio calculation formula:
市盈率=公司市值/公司盈利
PE=P/E
The company's market value is equal to the company's share price × Total number of shares. The company's market value can be seen directly from the financing software. The company's profitability has many different financial calculation forms, which leads to three different P/E ratio calculation methods:
1. Static P/E ratio: if we use the earnings data of the previous year when calculating the P/E ratio, we get the static P/E ratio;
2. Rolling P/E ratio (P/E ratio TTM): If the company's earnings data of the past four quarters are used when calculating the P/E ratio, the rolling P/E ratio is obtained;
3. Dynamic P/E ratio: If the predicted company's earnings data for the next year is used when calculating the P/E ratio, the dynamic P/E ratio is obtained.
Among the three P/E ratios, the static P/E ratio and the rolling P/E ratio are most commonly used. These two P/E ratios are calculated according to the company's published data. The dynamic P/E ratio is the prediction result, which will have certain errors, and we generally do not use it. We can directly see the P/E ratio data of stocks on the financial management software. For example, the following is the P/E ratio data of Guizhou Moutai stock of Snowball software.
The unit of P/E ratio is "times"
