Usage of P/E earning models as a tool for valuation of shares in condition of global market

¹ University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitna 1, 010 26 Zilina, Slovak Republic
² University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitna 1, 010 26 Zilina, Slovak Republic

^* Corresponding author: jan.chutka@fpedas.uniza.sk

Abstract

With the rapid development of computational technology, non-traditional mathematical and statistical methods have also parallely developed to help simplify and accelerate the computation of certain tasks, or even to solve problems that are usually unsolvable. The aim of this paper is to get closer to the P/E earning models and briefly summarize their calculation and usage options. In the first part of our paper we briefly worked out the theoretical basis of these models. Furthermore, we focused on a detailed description of their calculation and use in calculating the value of shares. In the second part of the work we focused on the application of the calculation of the selected P / E model to Apple inc. in the course of 2018 and compared the data obtained with another instrument to identify the intrinsic value of the action. In the last part we focused on the interpretation and summary of the results of the application. We consider the greatest added value of our contribution to be a theoretical comparison of different types of calculation and deeper application of the selected model to real market prices of Apple inc. with the interpretation of the results obtained. We can conclude that the aim we have set is met and we believe that our article will be a valuable addition to the issue in this area.