Comments on: S&P 500 Price, Earnings, and P/E Ratio Charts

By: Jeff14

Jeff14 — Mon, 16 Nov 2009 18:58:40 +0000

If you are interested I just figured out
The P/E given each quarter is given according to the last 4quarters of earnings per share. So I dont need an average my question was kind of nonsens. I dunno if my explanation is clear so here is an example. When you look at the excel sheet given by Standards and Poors you can see(simplified version):
Price EPS P/E
12/31/2001 1148.08 $9.94 29.55
09/30/2001 1040.94 $9.16 24.77
06/30/2001 1224.38 $9.02 26.03
03/31/2001 1160.33 $10.73 21.94
12/31/2000 1320.28 $13.11 23.52
09/30/2000 1436.51 $14.17 25.30

To get the yearly EPS I need to sum up the 4 quarters of 2001 which gives me $38.85
Then to get the P/E for 2001 I do 1148.08/$38.85= 29.55, which is the same result as the one shown on the 09/30/2001.
TO get any P/E (for any quarter) I need to use the EPS of each last 4 quarters. Then P/E is always given in a per year basis. And I must do the same operation to get the P/E of each quarter.

By: Jeff14

Jeff14 — Mon, 16 Nov 2009 17:59:20 +0000

Ok thx a lot for your help

By: admin

admin — Tue, 03 Nov 2009 22:24:41 +0000

Jeff,

not sure how Standard and Poors calculated that data, I just use their monthly P/E ratio and try not to average anything. Shiller applied a moving average over 10 years, which is a valid thing to do, but one has to keep in mind that smoothes out the curve quite a bit. If you want a yearly P/E ratio, I would do what you said, average the 4 quaterly values. I don’t believe the quarterly values are 12-month moving average values, probably end-of-quarter values. You’d have to email S&P to find out for sure. Shillers data used quarterly values before S&P reported monthly P/E ratios, and he extrapolated the months in between. See his Excel spreadsheet that I linked to, and take a look at the formulas he used.

By: Jeff14

Jeff14 — Tue, 03 Nov 2009 17:53:22 +0000

Hello,

I went on Standard and poor website to get the data for the P/E Ratio but there is something I dont understand.
For exemple when they give:
12/31/2001 29.55
09/30/2001 24.77
06/30/2001 26.03
03/31/2001 21.94
the PE is given for the quarter or a trailling 12month each time?
Then if i want the PE for 2001, should I just get the last number for 2001 or make an average of the 4 quarters ??

Thank you!

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