1. Judging from the landlord's problem, you use a trailing P/E ratio, which is based on the following assumption: the current price is the embodiment of the past profit level. If you use this P/E ratio, it is suggested that your time interval is the past 12 months, not the latest year, because the information of the latest year is out of date relative to the current price.
As analysts, we should pay more attention to the benefits that can be generated continuously. I agree to exclude non-main income and expenditure to more truly reflect the company's ability to continue to operate.
Therefore, the denominator should be "earnings per share for the previous 12 months".
After the time interval is selected, check the notes of the company's financial statements in the first four quarters, excluding non-operating income and expenditure (including income, potential losses, asset disposal gains and losses, exchange gains and losses, etc. ) from net profit and calculate earnings per share.
2. Many industries in China are cyclical, so the income changes accordingly, with peaks and valleys. In this case, it is necessary to adjust the "return to normalization".
The practice is: take a complete cycle as the analysis time interval, such as 5 years, take the arithmetic average of 5 years ROE and multiply it by equity.
Normalized net profit =5-year arithmetic average return on equity * equity
3. If the landlord wants to make a comparative analysis between companies in the same industry, there will be more things to be adjusted. Because different companies may adopt different accounting policies and accounting estimates for different purposes. Including but not limited to the following adjustments:
A. Inventory circulation mode: FIFO? Last in first out? I suggest that everyone should adapt to FIFO.
B.8 provision for loss: you have to determine a more reliable provision method and proportion according to different industries, which will affect the total profit.
C. Long-term investment accounting method: equity method? Cost method?
D. depreciation: straight line? Accelerate?
E. revenue recognition method: according to income standard? According to the industry accounting system?
F. Accidents
G related party transactions: in shady areas, if there is a large proportion of changes, there are usually whitewashed statements.
4. Summary: One principle is to make EPS reflect the profitability of the company as truly as possible.
I think the leading P/E ratio may be better when making investment decisions.
Take the EPS forecast value in the next 12 months as the parameter. Personal preference.
I have to admit, I really want to get 200 points. If you think my answer is more objective, please give points. Monthly ticket monthly ticket monthly ticket