Talk:Price–earnings ratio

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This article was the subject of a Wiki Education Foundation-supported course assignment, between 7 July 2020 and 14 August 2020. Further details are available on the course page. Student editor(s): Aaronlai23.

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Interpretation

This is in regard to the {{dubious}} tag I placed on the first paragraph of the "Interpretation" section.

The content of this paragraph is not so much "untrue" as it is not reflective of the way this is normally presented, and this perspective is more likely to be confusing than helpful. Although there is a source that supports this to some degree, it really distracts, and the reader that takes this explanation to heart may find themselves clarifying that he's talking about the "1 year P/E ratio", or perhaps claiming that the 5-year is calculated by dividing current price by 5 years of earnings (i.e. using the combined earnings over 5 years rather than the average earnings over 5 years). The fact that P/E ratio can be calculated using different earnings periods than the last 12 months, and that it doesn't have to be a 12-month period but it should be the average annual earnings over that period, that can be explained, but as this paragraph is written, it is mostly extraneous and more likely to be confusing than clarifying. Fabrickator (talk) 22:10, 4 December 2023 (UTC)[reply]