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Which of the following is NOT a true statement about Price to Earnings ratios? P/E ratios…
Which of the following is NOT a true statement about Price to Earnings ratios?
P/E ratios are useful for comparing companies in the same sector.
P/E compares a company’s market valuation with the income it is actually generating.
Stocks with higher forecast earnings growth will usually have a lower P/E.
With trailing P/E, the earnings per share is based on the most recent 12 month period.
Which of the following is a true statement about using Return on Equity (ROE) to analyze a company?
All of these answers
If a company increases the debt percentage of its capital structure, its ROE will decrease.
If a company’s net margin increases, it results in a lower overall ROE.
ROE measures how efficient the company is at generating profits from the funds invested in it