The Price/Earnings (P/E) Ratio can be calculated by dividing the current market price of a share by the Earnings Per Share (EPS) of the company. The P/E Ratio can be used for many purposes, including: investment analysis, company valuation and client benchmarking.
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The London Stock Exchange glossary provides a definition of the P/E ratio and explains that 'A high P/E ratio means the company is highly-rated by the stock market, suggesting that investors think its prospects are good.'
More extensive explanations of these terms are provided by a number of books in our collection, including 'The Financial Times Guide to Investing' by Glen Arnold (FT Prentice Hall, 2004) and 'The Financial Times Guide to using the Financial Pages' by Romesh Vaitilingam (FT Prentice Hall, 2010).
An explanation of the use of P/E ratios from a valuation perspective can be found in 'Determining value- valuation models and financial statements' (Pearson Education, 2001) and 'Valuation of Unquoted Companies by Christopher Glover' (GEE, 2004) on pages 215-218.
P/E ratios for individual companies
The Financial Times publishes P/E ratios for individual companies in the London Share Service section (companies listed under industry sector headings) of the newspaper.
P/E ratios for industry sectors
The Financial Times publishes P/E ratios for industry sectors in the FT Actuaries Share Indices (UK Series) table in the newspaper.
The FT Markets Data: Research Data Archive provides an online source for daily versions of this table back to January 2007.
To use this service:
1. Use the dropdown menus to select the category of Equities and the report FTSE Actuaries Share Indices - UK Series.
2. Select the appropriate date.
3. Click on download to view the table.
Older equivalents of this table can be accessed by visitors to the ICAEW Library & Information Service through the microfilm editions of the Financial Times (for further details about access see Who can use the ICAEW Library & Information Service?).
The individual listings within the FT 500 provide annual P/E Ratios for the FT global 500, FT Europe 500, FT US 500, FT UK 500 and FT Japan 500. At the time of writing, the latest annual edition of the FT 500 was available online along with archived versions for previous years.
The London Business School publish the quarterly publication Risk Measurement Service which provides data on the yield and earnings multiple (including the net yield and P/E ratio) for '3,000 UK shares, including every UK stock with a full listing on the London Stock Exchange and all AIM listed stocks'. The listings of companies are arranged alphabetically and by sector, with highlight tables which include 'Highest and lowest price/earnings ratio'.
The ICAEW Library & Information Service holds copies of the Risk Measurement Service from the issue for the January-March 2008 quarter onwards.
The quarterly publication Company Refs provides prospective P/E ratios for individual companies (including fully listed companies and AIM listed companies) which look at the 12 months ahead. Company Refs also provides Price-Earnings Growth factors for companies.
Our online catalogue, LibCat, provides details of the most recent edition that we hold - see the entry for Company REFS- really essential financial statistics.
The quarterly publication The Company Guide (HS Financial Publishing Ltd) provides prospective P/E ratios for individual companies, calculated using the latest prices shown in the book.
Our online catalogue, LibCat, provides details of the most recent edition that we hold - see the entry for The Company Guide.
The book 'Valuation of Unquoted Companies by Christopher Glover' (GEE) includes an appendix with 'Statistics and data for 31 March 1982 valuations' providing P/E ratios for individual sectors (e.g. contracting & construction) and companies within those sectors (e.g. Taylor Woodrow).
F:1 FT Actuaries Share Indices as at 31 March 1982.
F:3 Selected investment statistics (including fully taxed P/E ratios) for constituents of the FT-Actuaries All-Share Index as at 31 March 1982.
The eBooks 'The Financial Times Guide to using the Financial Pages' (FT Prentice Hall, 2006) and 'Valuation- measuring and managing the value of companies' (Wiley, 2005) are available to logged-in ICAEW members and ACA students through our eBooks collection. Both titles include information on P/E ratios.
A reading list of further articles and books on P/E Ratios is available from LibCat, our online catalogue.
To find out about how you can access the material mentioned on this page or in this reading list please see our book loans and document supply (by post, fax and e-mail) pages. Alternatively, contact the enquiry team by email at firstname.lastname@example.org or by telephone on +44 (0)20 7920 8620.
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