# An analyst makes the following statement: Use of P/E and other multiples for analysis is not effective

## Question:

An analyst makes the following statement: “Use of P/E and other multiples for analysis is not effective because the multiples are based on historical data and because not all companies have positive accounting earnings.” The analyst’s statement is most likely:

A. Inaccurate with respect to both historical data and earnings.

B. Accurate with respect to historical data and inaccurate with respect to earnings.

C. Inaccurate with respect to historical data and accurate with respect to earnings.

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**Related Book For**

## Investments Principles Of Portfolio And Equity Analysis

**ISBN:** 9780470915806

1st Edition

**Authors:** Michael McMillan, Jerald E. Pinto, Wendy L. Pirie, Gerhard Van De Venter, Lawrence E. Kochard