Trailing Price to Earnings Ratio

The P/E ratio is defined as:


However, with Trailing Price to earnings (P/E) the earnings per share is the net income of the company for the most recent 12 month period, divided by the weighted average number of common shares in issue during the period. Monthly earning data for individual companies are not available, so the previous four quarterly earnings reports are used and earnings per share are updated quarterly. Note, each company chooses its own financial year so the timing of updates will vary from one to another.

Example: Google’s Trailing P/E is 19.03

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