Mr. Khan, I used to watch your videos when I was studying at university, mostly science and math (2009-2013). Now I have returned for finance + stock market information (2021). Thanks for all the content!
No usually when you calculate Earnings Per Share, You subtract the dividends from the Net Income divided by the shares outstanding. So essentially the EPS comes after taking out the dividends paid. Think of it this way, the dividends paid to shareholders are not counted in the EPS. Although I could be wrong as what i'm talking about is preferred dividends.
I think company C is an unlikely case. With increasing earning, price/share will also go up because people want to buy it, then P/E will also go up too. Like you said, market will not allow free money. CMIIW
Question: Let's say for 2012, the P/E is 6.25 (using the example in the lesson)...how can I use that number to evaluate the market value of that share in 2012?
I am very new to the stock market. My biggest concern is Earnings Per Share? if I were to buy a share of any company and for example the EPS is 5 dollars. is that the only thing I get or is it 5 dollars per Hour or Day. aslo if I decide to hold on to the share and forget about it for a week and during that week it goes up or down. will I gain more money or owe money in the process.
hi...won't the price of $100 change over different periods...i believe its the market price....so accordingly the p/e ratio should also vary...isn't it so
"What equipment do you use to make your videos? I use Camtasia Recorder ($200) + SmoothDraw3(Free) + a Wacom Bamboo Tablet ($80) on a PC. I used to use ScreenVideoRecorder($20) and Microsoft Paint (Free)."
You can look at something different like price to sales. sales should always be positive. You can also look at operating cash flow and and look at price to Operating cash flow. Operating cash flow should be positive too. If it isn't.... well than I probably wouldn't buy it. :)
Negative P/E is if a company either has no earnings or is posting losses. Usually a negative P/E will not be displayed as a negative number rather, it would just be labelled "N/A"
Mr. Khan, I used to watch your videos when I was studying at university, mostly science and math (2009-2013). Now I have returned for finance + stock market information (2021). Thanks for all the content!
11 years later and nobody else can explain this stuff better than Khan ! Love the content. Love Khan academy!!
thank you, so much easier listening to someone explain than just reading it
Sir i just discovered ur lectures... I think i made the biggest discovery of the year.... I m in love with ur lectures...... Sir wonderful job done
I really liked this. I never quite got what P/E was or how to use it when considering a company's potential price!
Excellent video. Thanks!!
Thanks for the very interesting and informative video that really explains P/E Ratios in an easily digestable format.
Good definations to P/E. simple and logic tips.thanks for sharing,Merry Christmas.
No usually when you calculate Earnings Per Share, You subtract the dividends from the Net Income divided by the shares outstanding. So essentially the EPS comes after taking out the dividends paid.
Think of it this way, the dividends paid to shareholders are not counted in the EPS. Although I could be wrong as what i'm talking about is preferred dividends.
Really enjoying the videos, Do you have a video on Growth ratio of Equity/EPS/ and Sale?
Thanks Khan! I get it now... ;)
Thank you.
man this is cool
the market value of that share can safely be decided by the MFRY or the Graham Number or the Price to Tangible Book Value (all the same).
Haiden Morgan 😂😂😂
I think company C is an unlikely case. With increasing earning, price/share will also go up because people want to buy it, then P/E will also go up too. Like you said, market will not allow free money. CMIIW
Question: Let's say for 2012, the P/E is 6.25 (using the example in the lesson)...how can I use that number to evaluate the market value of that share in 2012?
reupload this in 720p :D
Hi, how does leverage impact PE ratios (presuming in the same industry, same growth rates etc)?
I am very new to the stock market.
My biggest concern is Earnings Per Share?
if I were to buy a share of any company and for example the EPS is 5 dollars.
is that the only thing I get or is it 5 dollars per Hour or Day. aslo if I decide to hold on to the share and forget about it for a week and during that week it goes up or down. will I gain more money or owe money in the process.
VOLXIN you can never owe money if you are buying shares. you can lose your initial investment, but that's it (assuming you're not shorting stocks).
1st everything 5/5
hi...won't the price of $100 change over different periods...i believe its the market price....so accordingly the p/e ratio should also vary...isn't it so
HI MR.KHAN..CAN YOU TELL ME WHICH SOFTWARE YOU USE TO RECORD THIS CLASS
"What equipment do you use to make your videos? I use Camtasia Recorder ($200) + SmoothDraw3(Free) + a Wacom Bamboo Tablet ($80) on a PC. I used to use ScreenVideoRecorder($20) and Microsoft Paint (Free)."
Thanks a lot for the information
I can't see the video, any problem??
howdy, how do you quantify the the P/E if the EPS is negative? I understand how to do the math but what the hell do i do with a negative P/E ratio?
You can look at something different like price to sales. sales should always be positive. You can also look at operating cash flow and and look at price to Operating cash flow. Operating cash flow should be positive too. If it isn't.... well than I probably wouldn't buy it. :)
"Who in their right mind would buy a stock with a 100 P/E ratio???"
2021 TSLA:
"Pathetic..."
That quality tho
hi, what is a negative p/e?
Negative P/E is if a company either has no earnings or is posting losses. Usually a negative P/E will not be displayed as a negative number rather, it would just be labelled "N/A"
nobody is watching this in this crazy market?hummmm
Lol Watching this in 2021, its so weird hearing references to the Great Recession as if its a current thing.
370% consistently? trading what cocaine?
Haiden Morgan No, TCEHY