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Plotting PE or P/B Ratio chart

Questions › Category: Valuation Quadrant › Plotting PE or P/B Ratio chart
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Zeniv Kwang asked 2 months ago

Hi Victor,
I like to check when using historical data in yahoo finance, sometimes the close price and adjusted close price differs. In those cases, which should we use for the share price data point for plotting the PE or P/B chart?
Adjusted close price? or close price?

Zeniv Kwang replied 2 months ago

And what is the difference between close and adjusted close?

1 Answers
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Victor Chng answered 2 months ago

Hi Zeniv,
 
You should use the close price. Close price takes into account of stock split already. As for adjusted price, it takes into account stock split and dividend. You should focus on the close price and ignore the adjusted close price.

Zeniv Kwang replied 2 months ago

Noted, thanks VIctor for the clarification.