China Listed Company Overall P/E & Factors Influencing Analysis

P/E ratio is one of important financial targets. It is simple but abundant in connotation, and is usually used in the evaluation of stock value of the corporation to judge the stock price, risk and the prediction for the earning in the further. There are a great many conflicts in the target for the differences in the understanding from different angle.At the empirical angle, this paper analyzes the whole level of P/E ratio of China's listed company, which aimed at solving two problems: firstly, how much of the average P/E ratio of stock market of our country is reasonable, and what's the result if there is deviation. Secondly, which factors actually can exert the largest and the most obvious influence on the P/E ratio.Firstly, this paper calculates the whole theoretical P/E ratio of listed company of our country by Extra Profit Model, and finds out that the whole P/E ratio of China's listed company is in the normal level in the most years of using sample, which conforms to the economic law. It has been rectified even if there is deviation occasionally.Secondly, this paper summarizes the 8 possible factors that can affect P/E ratio through the inference of theoretical model and the past experience, and find out the relations between many factors.At last, the research conclusion and the problems revealed are given, and the major point to research and some other research suggestions have been posed.