How is P/E of SENSEX calculated???

SENSEX P/E Ratio can be calculated in the same way as a company's P/E ratio is calculated.
The steps can be like this:
  1. Divide Total Market Cap of Sensex Constituents by the total number of outstanding shares of the constituents. This will provide the numerator of the P/E ratio, i.e., price per share.
  2. Similarly, total the trailing earnings of all the constituents and divide the resultant sum once again with the total number outstanding shares of the constituents to get EPS, the denominator.
  3. Divide the numerator/denominator and you have the Sensex P/E ratio in hand.

A short-cut method is:

P/E = Market Cap/Total Earnings

PURPOSE & DISCLAIMER:

For the first time in my life i am doing something that i am good at, in public. This blog is purely a cut-copy-paste work baring a few personal views. Their is a glut of sites, blogs, pages and views about investment & savings. Still understanding and finding the right instrument is difficult. This is an endeavor to simplify the complicated financial jargons and products to make it understood by laymen.

As the URL name suggests, it’s for laymen by a layman of finance. This blog is strictly meant for me, my family and my friends and their few friends. The blog is not meant for experts & gurus of finance.

The author of this page is not a registered financial advisor. One should not construe anything written here to be financial advice. All information is a point of view and is for educational and informational use only.