You can also find many things through the price-earnings ratio, which is also called "cost-benefit ratio", "stock price-earnings ratio" or "market price-earnings ratio". P/E ratio refers to the ratio of stock price divided by earnings per share. Or divide the company's market value by the annual profit attributable to shareholders. P/E ratio is the ratio of share price to earnings per share. The price-earnings ratio widely discussed in the market usually refers to the static price-earnings ratio, which is usually used as an indicator to compare whether stocks with different prices are overvalued or undervalued. It is not always accurate to measure the texture of a company's stock with price-earnings ratio.
It is generally believed that if the price-earnings ratio of a company's stock is too high, then the price of the stock is in a bubble and its value is overvalued. When a company grows rapidly and its future performance is promising, when comparing the investment value of different stocks with P/E ratio, these stocks must belong to the same industry, because the company's earnings per share are close and the comparison is effective. P/E ratio is one of the most commonly used indicators to evaluate whether the stock price level is reasonable, and it is a valuable stock market indicator. On the one hand, investors often don't think that the profit figures calculated in strict accordance with accounting standards truly reflect the profitability of the company on the basis of going concern. Therefore, we must first examine the price-earnings ratio of index funds.
Query process:
1. Index funds follow the trend of the index closely, so the price-earnings ratio of index funds is actually the price-earnings ratio of the index they track. Investors can check the price-earnings ratio of the index through the China Securities Index Network. After entering official website of CSI Index Co., Ltd., they can search the name of the index you want to query in the search box, then enter the index page, find and click "Index" valuation, and download the form to open it to see the price-earnings ratio and dividend yield of the index.
2. In addition to the P/E ratio, investors can also know the valuation of index funds through the P/B ratio. However, these two methods have certain limitations: at present, entrepreneurial companies with no profit are not suitable for valuation with P/E ratio method, because negative P/E ratio is meaningless; For manufacturing industries with a large number of fixed assets and emerging industries with light assets, the price-to-book ratio is no longer applicable.