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Running head: PRICE EARNING RATIO AND NYSE REPORTS 1

PRICE EARNING RATIO AND NYSE REPORTS 3

Application of Price-earnings ratio and details contained in the NYSE trading reports

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The price multiple or a price-to-earnings ratio (P/E) is the ratio calculated for valuing a company or a firm. In mathematical terms, the rate involves measuring the current market share price relative to the earnings per share (Anderson, 2012). If the results indicate a high P/E ratio after the calculation, then the company stock is overvalued, which suggests high growth future-expectation from the investors. Currently, there is two types of price-to-earnings (P/E) ratio used which includes a forward P/E ratio and trailing P/E ratio. Under the forward P/E ratio, all the companies’ impairments and excludes possible charges. Therefore, getting the actual GAAP earnings his likely to be lower, and it also requires the company guidance for its future forecast.

On the other hand, the trailing P/E ratio calculation involves all the costs and expenses that may include by the company in a share (Anderson, 2012). It therefore relies on the recent past earnings performance to get the value for a company's stock, which limits its accuracy because of the future uncertainty. Using the two techniques, an investor can quickly get a more reliable gauge of what the stock should be worth currently and in the future.

New York Stock Exchange (NYSE) is among the leading stock exchange in the world, and it has multiple company lists that trade their stock under it includes the Chesapeake Energy Corporation (CHK) as its stock ticker symbol. The report provided for this stock as several details concerning the company’s shares. The first information that one can get at a glance is its Ranking among other companies trading under NYSE, in which it is one of the best trading company. An investor can also identify other details such as the price change and the percentage change compared to the previous close (“NYSE Report Center, "2019). additionally, recent stock trade price, the lowest prices reached report, the highest price reached an opening price, closing price, and the last traded stock value for the company, NYSE also provides an indicator to show the price directs in the market. The reporting platform also provides a section in which an investor can get a historical summary concerning the company. For example, there is a weekly record, monthly annually, and five-year history for all the stock the company has traded is its past.

In conclusion, the P/E ratio is a statistical measure that helps stock traders, investors, to develop a price gauge for valuing a company's stock by identifies the current share price relative to the per-share earnings. An investor can get other information such as the company's historic recordings in the stock market, previous highest price, lowest last price, stock price, and price direction concerning common stock such as Chesapeake Energy Corporation.

References

Anderson, K. (2012). The Essential P/E: Understanding the Stockmarket Through the Price Earnings Ratio. Harriman House.

NYSE Report Center. (2019). Retrieved from https://www.nyse.com/markets/reports