A P/E of 8× means the market values the company at eight years of its current profit. A low P/E can signal a cheap share, or one the market expects to earn less in future; a high P/E usually reflects expected growth or unusually depressed current profit.
P/E only makes sense when earnings are positive, so loss-making companies have no P/E. Compare P/E ratios within a sector: banks, cement makers and technology companies are valued very differently.
Smart Money shows P/E at the latest close using the newest earnings available: the last four quarters when they are newer than the annual report, otherwise the latest fiscal year.
Formula
P/E = share price ÷ earnings per share (EPS)
P/E ratio (price-to-earnings) on the Pakistan Stock Exchange
Across 353 listed companies with the figure, the median is 8.8×.