Trailing P/E

[carolinesherif]

We want to calculate trailing P/E for the below stock in 2017:

31 December 2017 31 December 2016 EPS $1.03 $0.89 Core EPS* $1.31 $1.01

* Core EPS is a non-GAAP measure that excludes acquisition charges of $0.18 and $0.12 in 2017 and 2016, respectively, as well as $0.10 in 2017 related to the settlement of a lawsuit.

Zhang notes that Cratt is currently trading at $11.31

Should not we multiply the price by the growth rate to get the trailing P/E ratio?

[125mph]

The question is asking for the trailing P/E, not the justified trailing P/E.

Trailing P/E would be P₀/E₀ and obviously making the necessary adjustments.

[Appro]

@carolinesherif

We want to calculate trailing P/E for the below stock in 2017:

31 December 2017 31 December 2016 EPS $1.03 $0.89 Core EPS* $1.31 $1.01

* Core EPS is a non-GAAP measure that excludes acquisition charges of $0.18 and $0.12 in 2017 and 2016, respectively, as well as $0.10 in 2017 related to the settlement of a lawsuit.

Zhang notes that Cratt is currently trading at $11.31

Should not we multiply the price by the growth rate to get the trailing P/E ratio?

It is not justified and as trailing it will be based on the past 12 mo so after adjustment it will read 1.03+. 0.10 = $1.13

so PE shall be 11.31/1.13 = 10.008