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Sri Lanka Equity Forum » Stock Market & Forum Help » what is P/E ratio?

what is P/E ratio?

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1 what is P/E ratio? on Thu Jun 30, 2011 11:10 pm

UNI


Senior Equity Analytic
Senior Equity Analytic
can somebdy tell me what is good high P/E or low P/E?

how offen comanies issue there financial statements?

how offen they declare their dividends?

2 Re: what is P/E ratio? on Thu Jun 30, 2011 11:18 pm

sanjeewa88

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Manager - Equity Analytics
Manager - Equity Analytics
@UNI wrote:can somebdy tell me what is good high P/E or low P/E?

how offen comanies issue there financial statements?

how offen they declare their dividends?

Here are some fact which could help you to understand. (But not complete)

http://forum.srilankaequity.com/t5903-why-arent-ipo-s-ever-priced-cheap

3 Re: what is P/E ratio? on Thu Jun 30, 2011 11:25 pm

a_randy

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Manager - Equity Analytics
Manager - Equity Analytics
For an instance, you spend Rs. 40 for share and you earned Rs.8. Then your Price Earning Ratio is 40/8 = 5.
For a same example you think you earned Rs.20. Then your Price Earning Ration is 40/20 =2.

What is good..? Low or High..?

I'll give dividend equation tomorrow.
Very Happy

4 p/e Ratio I got it.. on Thu Jun 30, 2011 11:40 pm

UNI


Senior Equity Analytic
Senior Equity Analytic
it means we should have low P/E ratio and high EPS right?

thanks randy..
can we compare these with other companies?
what are the other things we have to look like EPS,P/E?
what are fundamentals?

5 Re: what is P/E ratio? on Fri Jul 01, 2011 12:39 pm

a_randy

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Manager - Equity Analytics
Manager - Equity Analytics
Definitely correct UNI Very Happy

Can we compare these with other companies?If you have time go through their Annual Reports / QR and compare each other or by sector wise. For quick calculation use Sector PER instead of PER (www.cse.lk -> Equity Market -> Sector Wise Market Summary )

What are the other things we have to look like EPS,P/E? There are many things you can consider before selecting your stock.
1. How share vary on past few months / year
2.Company background (business type, sources of cash flows, past history, present performance, plans, etc,.)
3. Financial ratios (as above)

What are fundamentals? Fundamental is a Economic stability of a firm rather than day trading Laughing , you may analyze deep into financials (using report, etc.,) to find out whether they are undervalued or overvalued. I don't mention any calculation due to regulations by SEC.

Please do your own calculations and find the sound stocks.

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