Here is the synopsis of our sample research paper on /E and Book to Price Ratio Calculations. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
PThis 5 page paper uses data supplied by the student to calculate the price earnings ratio and the book to price ratio. The calculations are shown and the paper examines what may cause the ratio variations seen over the years. The bibliography cites 1 source.
Page Count:
5 pages (~225 words per page)
File: TS14_TEPECalc.rtf
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Unformatted sample text from the term paper:
per chare and dividing the price by the earnings. This is shown in figures 1 Figure 1 P/E Ratio 1998 1999 2000 2001 Average share value 11.25 16.75 28.50
9.50 Diluted Earnings per share 0.27 0.55 0.31 0.24 P/E Ratio 41.67 30.45 91.94 39.58 Looking at this there does appear to be some level of volatility. To consider what
this is we first have to consider what the ratio means and the inputs. The price earnings ratio is an indication of the cost of the share against the earnings
of the company. As a rough guide the price earnings ratio can be considered the number of years that it would take the company to earn its market value. This
is a good comparator ratio, the way it is calculated is usually to take the current market price of the share and then to divided that by the earnings per
share figure. The EPS that is used will usually be the nearest annual reports figure, and as such the P/E ratio is only a rough guide to that figure, but
has its greatest value in a comparison. This is a ratio where the lower figures tend to be better, higher figures may be seen in companies that are expected to
show high growth in the future or those shares which are over priced, so despite the changes there does appear to be an optimistic opinion of the company. Looking
at the reasons for the changes these we need to look at the underlying figures that make up the ratio. Looking at these there is generally stable earnings per share.
With the exception of 1999 when there is a higher level. The earnings per share are also affected by changes in accounting policies this is seen in 2001 which decreased
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