P/E ratio refers to the ratio of stock price divided by EPS. Or divide the company's market value by the annual profit attributable to shareholders.
When calculating, the stock price usually takes the latest closing price, and if EPS is calculated according to the published EPS of the previous year, it is called historical price-earnings ratio;
Generally, consistent estimation is used to calculate EPS estimated P/E ratio, that is, the estimated average or median value obtained by the institutions that track the company's performance after collecting the forecasts of many analysts. What is a reasonable price-earnings ratio, there is no certain standard.
Extended information If a company obtains better earnings per share from non-operating income such as investment income, its static P/E ratio of that year is quite attractive;
If a company used working capital to make high profits in stock trading in that year, or realized some assets in that year and gained a lot of transfer income, it is entirely possible for some companies that are not particularly large in scale to greatly improve their performance, but this is more a breakthrough growth brought by non-operating income, which needs to be treated dialectically.
It is a good thing that non-operating income brings high income to the company. It will undoubtedly stimulate the company in the short term, but such income is accidental and unsustainable.
As soon as the assets are transferred, they will be gone, and the stock investment itself is uncertain. No one can absolutely guarantee how much income a year will bring. Therefore, non-operating income can be met but not sought.
Baidu Encyclopedia-P/E ratio