Question

Compare the PE ratios of a couple of companies you are interested in. What does the comparison tell you? Was it surprising or what you would have expected?

Answer 1

table showing PE ratio's

Particulars	Apple	Amazon	Tesla
PE ratio	13.12	91.77	NA

The simple explanation to this is amazon is selling at premium than apple and tesla. PE ratio simply states how much money a person is ready to pay for 1$ earning of company. Normally PE is high in case of company which is in growth phase as investor expects earning of company to increase significantly and thus paying premium based on it's future ability to earn profits
Apple's PE is lower as compared to Amazon as it is not in growth phase, it will continue it's sales at same level for some year where as amazon's sales might increase unexpectedly as it is growth phase
Tesla's PE is NA as it is not earning any profit. In such company instead of PE one should use other matrix such as Market cap/sales ratio