Which stock price is used when computing for the P/E and P/B ratios?
I know this is a stupid question, but I am trying to compile a list of P/B ratios from Capital IQ. However, There are four categories for the P/B values: Average, High, Low, and Close? Which one do I use?
In general also, which stock price is used by analysts when calculating such metric (including P/E ratio)?
Thank you!
It think it is about consistency and that you always use the same metric, when comparing companies.
Hence I'd say its convenient to use the closing price of the most recent passed trading day (when i start an analysis its usually yesterday). I would definitely use this one most.
An Average might be useful, but not for one trading day only. You'd want to look at a broader period of time to see how it compares on average to the current P/B level (based on yesterday's closing price)
Nemo voluptate est sunt nemo esse quod. Totam quis quod perferendis tenetur delectus. Sint pariatur tenetur eos. Aspernatur voluptate est animi qui.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...