Personal understanding, I am also studying and hope to discuss it together.

What you are referring to is that the price-to-earnings ratio is very high, which means that the company is already a listed company. I think from a normal perspective, this company may be in a rising period of corporate development and has not yet entered a stable period. At this time, the company's investment expenditures are also

Very large. When operating income reaches a new high, the company's investment offsets the income, resulting in no profit on the company's books. However, the price-earnings ratio is the market's reflection of the company's expected payback period. Price-earnings ratio = market price per share divided by earnings per share.

For example, if the market price per share is 20 yuan and the earnings per share is 1 yuan, then the price-to-earnings ratio is 20 times, which reflects that investors can obtain the principal after 20 years (of course you still have the stocks you bought before).

Although companies currently have no profits on their books, the price-to-earnings ratio is an expectation. This indicator focuses more on the future. If the company can bring good profits in the future, people will buy it.

In fact, you can take a look at JD.com, which is a good example. JD.com is still losing money. According to the latest JD.com prospectus, as of March 31, 2014, JD.com’s first quarter net revenue reached 22.657 billion.

yuan, a year-on-year increase of 65% from 13.725 billion yuan in the same period last year.

But in terms of net profit, JD.com’s net loss in the quarter was 3.795 billion yuan, the highest in the past two years, with a net loss rate as high as 16.7%.

But this does not meet everyone’s expectations. Why do we need to explore the story behind the data? Why is the net profit so low when the revenue is so high? It turns out that the year-on-year increase in operating expenses in the first fiscal quarter is greater than the year-on-year increase in total net revenue, mainly because

Equity compensation expenses of 3.67 billion yuan were incurred in the first fiscal quarter, resulting in a significant increase in "general and administrative expenses".

JD.com later explained that this equity incentive payment was mainly due to JD.com giving Liu Qiangdong 93,780,970 restricted shares. Such large-scale equity compensation plans are not common for companies, so we can eliminate this impact and JD.com will make profits under normal circumstances.

is good.

Therefore, everyone's expectations have changed due to Mianyang. There are still many people buying JD.com's shares (if it is listed). As a result, JD.com's stock price will rise, which will increase the price-to-earnings ratio.

At the same time, JD.com’s strong development potential (including a strong logistics system, strong customer stickiness and foundation is also the support point that everyone expects). Sina Weibo, Facebook in the United States, etc. are also in a similar situation. Although they are on the edge of profitability, they are mainly in the

Rapid development, a strong customer base, and the ability to make profits in a short period of time.

Okay, as can be seen from the above, the profit of a company can not only be seen in absolute numbers. We should restore its true face. Let’s look at its true face from an accounting perspective: 1. Through receivables items

Eliminate inflated profits (Ningguangxia). Such profits have no gold content. 2 Profits can be changed through the depreciation of corporate assets. The investment in corporate assets is actually a one-time investment that is amortized in installments, and different amortization methods bring differences.

For example, Jingdong Mall spends a lot on building its own logistics. After completion (the logistics has not yet fully demonstrated its effectiveness), a large expenditure will be incurred in the amortization of the current period, resulting in a decline in efficiency.

These will have an impact on corporate profits.

There are also some companies that use accelerated depreciation to reduce current profits. Fortunately, they can make less provision in the future, so that they can make profits in the future. 3. Some profit gains and losses in non-daily operations are divided into main categories according to the correlation between the activities of the company and daily operations: main

Operating business income, non-operating income, other business income. Main business income The income from the main business such as selling goods and providing labor services recognized by the enterprise can also be said to be the main business scope on the business license.

Non-operating income refers to various incomes generated by an enterprise that are not directly related to production and operations.

It mainly includes the following contents: (1) Fixed asset inventory surplus (2) Net income from the disposal of fixed assets (3) Non-monetary transaction income (4) Income from the sale of intangible assets (5) Net income from fines (6) Really unable to do so due to creditor reasons

Accounts paid (7) Education fees plus rebates.

Other business income refers to the income derived from other sales and other businesses other than the sale of goods.

It includes non-industrial service income such as material sales, technology transfer, purchasing and sales agency, rental of fixed assets, rental of packaging materials, transportation and other non-industrial services.

If profits include too much non-operating income and other business income, these are abnormal.

In addition, a very important factor in the P/E ratio is the stock price. The stock price is affected by many factors. The rise in the stock price may not be necessarily related to the company's operating results. For example, the emergence of favorable policies will increase investors' expectations, thereby raising the price.

The stock price has caused the price-to-earnings ratio to rise. I have bought concept stocks in the Tianjin Free Trade Zone. Those companies are basically losing money, but after the good news appears, everyone flocks to it and the stock price rises.

At the same time, there may also be positions held by institutional investors. Constant buying and speculation may cause the stock to rise, but this is not a normal phenomenon.