I'm calculating the P/E ratio of some International stocks and found a problem. Please look at this paticular stock:Thai Beverage Public Company Limited

The p/e calculated by yahoo finance is 31.33. Similar results can be found at google finance and bloomberg which are all over 20.

But if you look at income statement of this company, the net income is 25,226,000 thousands ~ 25 billions, and the market cap is 23.6 billion, which suggests p/e less than 1 (0.94)!

And I believe the net income data is correct on yahoo finance, because I have cross validated it with compustats global data.

Am I missing something here? Why the discrenpency? Thank you!


Just figured it out with the help from someone else... The market cap is in Singapore dollar because it's traded on Singapore exchange, but their income statement is in Thai Baht... That's why :)

  • $\begingroup$ Thanks for posting the answer to your question after figuring it out yourself. Note that you can also accept your own answers and thus mark this question as resolved. $\endgroup$ Mar 18 '17 at 23:43

There are two things I could think of.

First, when a stock has preferred shares, you have to subtract out the dividends to preferred share to get earnings available to common stockholders. I don't think Thai Beverage has preferred stock, but you should be able to check that on Bloomberg. If they are, then this would reduce earnings per share and increase the P/E.

The other correction is account for dilution in earnings per share. Diluted earnings per share takes into account the ability of some securities to convert into common stock. Some examples of these are convertible bonds, options, or preferred stock. If they are converted to common stock, then there will be more shares and thus less earnings per share, which would mean a higher P/E.


Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.