Price/Earnings Ratio Model (P/E)
The P/E looks at the relationship between the stock price and the company’s earnings. The P/E is the most popular metric of stock analysis. A valuation ratio of a company's current share price compared to its per-share earnings. For example, if a company is currently trading at $60 a share and earnings over the last 12 months were $2 per share, the P/E ratio for the stock would be 30 ($60/$2). The earnings multiplier can be computed as follows: P/E Ratio = Current Market Price of Shares / Expected 12-months Earnings per share However, the infinite period dividend discount model (DDM) can be used to indicate the variables that should determine the value of the P/E ratio as follows: Po=Do1+gre-g=D1re-g

If we divide both sides of the equation (earning per share), the result is: PoEPSo=DoEPSo1+gke-g
Thus earnings multiplier can be ultimately simplified as:
PoEPSo=PayoutRatio1+gke-g
This model implies that P/E ratio is determined by:
* The expected dividend payout ratio (dividends divided by earnings) * The estimated required rate of return on the stock (k ) * The expected growth rate of dividends for the stock (g)

Given the above formulas and information, we can now calculate the P/E ratio for Vingroup: Table 1: P/E Ratio forecast
| Current (9 mounths 2012)| 2013|
Growth rate| | 0.08|
Net Earning after tax| VND 1,352,077,007,504.00| |
Weight Average of Ordinary Shares| 645,358,358.00| |
EPS0| VND 2,095.08| VND 2,262.69|
P0 (14/12/2012)| VND 76,000.00| |
P/E| 36.27547465| |
| | |
PE Price | VND 82,080.00| |

Our computed P/E ratio of 36.275 suggests that investors are willing to give up 36.275VND for every 1VND of earnings that the company generates. In evaluating Vingroup’s P/E ratio to determine whether it is over / underpriced, we will compare the P / E ratio of Vingroup with the others in the same industry, if the P / E ratio of a company is higher than average,...

...Price / EarningsRatio
Q1: (Introductory) What three alternative measures of the price-earningsratio (P/E ratio) are described in this article?
Answer: Following are three price-earningsratio described in the article:
1. P/E ratio
2. “Forward” P/E ratio
3. “Trailing” P/E ration
Q2: (Advanced) Which of the three...

...CFA Institute
What Determines Price-EarningsRatios? Author(s): William Beaver and Dale Morse Source: Financial Analysts Journal, Vol. 34, No. 4 (Jul. - Aug., 1978), pp. 65-76 Published by: CFA Institute Stable URL: http://www.jstor.org/stable/4478160 Accessed: 12/06/2010 17:20
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/page/info/about/policies/terms.jsp....

...stock of this company at a current market price of $24 per share.
b. Justify your decision using at least three reasons that are based upon the ratios you calculated.
A) No, I would not buy stock at a market price of $24 per share because:
B) 1. The book value per share of common stock has declined from Year 10, 3.43 to Year 11, 3.30. It illustrates how much money each stockholder would get if the company were to liquidate its assets. At a marker...

...Price-to-earningsratio (P/E) is often used for assessing the company’s stock price. P/E is determined by first calculating the earnings per shares (EPS), which is the post-tax profits divides by the number of shares (Figure 1). Trailing P/E is equal to current market share price divided by trailing earnings per share for the past 12 months, whereas forward P/E is equal to current share...

...has the capability of transporting thousands of packages every day.
Dividend: The company currently pays out a quarterly dividend of $0.14, which annualized puts the dividend as yielding 0.62%.
Reasonable Valuation: The company carries a price to earningsratio of 14.02, which by nearly all standards is a relatively reasonable valuation.
Institutional Vote of Confidence: 78% of shares outstanding are held by institutional investors, displaying the...

...Liquidity Ratios: Current Ratio = Current Assets/Current Liabilities
Efficiency Ratios Asset Turnover Ratio = Sales Revenue/ (Fixed Assets + Current Assets)
Profitability Ratios Net Profit Margin = (Net Profit x 100) /Sales Revenue
Return on Capital Employed = Net Profit (Operating Profit) x 100
(ROCE) Capital Employed
Solvency Ratios...

...and 2
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Assignment 2012/2013 – Semester 2
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B. Com (Major in Banking and Finance) – Year III
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Ratio Analysis Report
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Student: Kevin Galea 205891 (M)
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Lecturer: Dr. Emanuel Camilleri
Introduction
The purpose of the following...

...Ratio analysis
Debt ratio
Debt ratio (2006-2007) = Total liabilities / Total assets = 10,170/12,064 = 0.84
Debt ratio (2007-2008) = 9,210/11,769 =
Debt ratio (2008-2009) = 10,003/11,229 =
Debt ratio (2009-2010) = 11,043/12,537 =
Current ratio
Current ratio (2006-2007) = Current assets / Current liabilities = 3,424/4,790 = 0.71
Current ratio (2007-2008) =...