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Activity 23 : Vodafone P/E ratio

Using the database find the relevant data for Vodafone and calculate its P/E ratio. If you have worked through the EPS section of this part of the site, you should have Vodafone's EPS ratio value already. If not, go there and work through it so that you can get your own EPS ratio for Vodafone.

Note: we found a negative EPS for Vodafone so we can't use that for our P/E ratio calculations. Let's take the adjusted EPS values from Vodafone's latest annual report and accounts:

Adjusted EPS: 3.54 pence per share

Did you get this?

Isn't it strange that a business with a negative EPS is quoted in a newspaper, The Times, as having a P/E ratio of +17.9: surely this presents a false set of expectations for current and potential investors?

Nevertheless, investors are saying that Vodafone is a good prospect for the future by marking up its P/E ratio so highly. This is despite the fact that Vodafone has had, at the time of writing, a string of very poor results and its senior executives had been battling over their bonuses!

Additional notes are available on advanced investor ratios.

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