You are given the following information about Swin Gin plc:

You are required to calculate the P/E ratio for each year, and comment on how the market appears to have reacted to changes in EPS.

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Year 1 Year 2 Year 3 Year 4 Year 5* Year 6 Year 7 EPS 0.50 0.55 0.62 0.01 1.20 0.83 0.90 Share price 6.00 7.70 9.92 6.00 7.20 12.45 15.30 (after publication of results for year) *In year 5 the company sold its head office building in London making a profit that amounted to 45p per share