Ask Colin

How up-to-date are the price earnings (PE) ratio numbers in the Australian Financial Review and elsewhere?

As stated at the top of the table each day in the Australian Financial Review, the earnings figures used are historical rolling 12 month totals based on company provided data in interim and annual reports.

It is my understanding that most historical ratios would be calculated this way. The only time you need to be a bit careful is around the reporting season when the rush of results sometimes means there is a delay of a week or more in updating the data in the tables. Just as at any other time, the tables are a useful starting point in arriving at a short list of prospects, but you need to check the figures against the company reports before acting on them.

Some analysts do not use historical earnings data for their PE ratios, they use prospective, which means forecast, earnings. You might feel that these would be more up-to-date at first glance. However, they are only going to be as good as the analyst

Keyword: