Which variables to use for calculating Price/Earnings Ratio (P/E)
Posted: 13 January 2013 08:07 AM   [ Ignore ]
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I want to calculate the P/E Ratio using Fundamentals Annually. Which variables can I use to calculate the P/E Ratio? Is there a variable that already does that for me?

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Posted: 13 January 2013 08:52 AM   [ Ignore ]   [ # 1 ]
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hi Chris,

The variables that are in Funda are listed here:
http://wrds-web.wharton.upenn.edu/wrds/tools/variable.cfm?library_id=129&file_id=65811

One way to compute the PE ratio is:

/* market capitalization (mcap) is #shares (csho) x end of year price (prcc_f) */
mcap csho prcc_f;

/* pe ratio is market cap divided by net income (ni) */
pe mcap ni;

/* exclude loss observations, set pe to missing (.) */
if ni 0 then pe = .; 

best regards,

Joost

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Posted: 16 January 2013 09:07 AM   [ Ignore ]   [ # 2 ]
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thanks a lot, that helped me out!

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