Two companies in the same industry, that generate the same amount of sales, and a similar level of earnings per share show the following trend in their P E ratio Company PE 2018 PE 2019 PE 2020(e) PE Industry Average A 4 5 20 50 5 5 B 4 5 6 8 What is your interpretation of these numbers If you have to buy one of them, which one will you choose why

The Answer is in the image, click to view ...

Question: Two companies in the same industry, that generate the same amount of sales, and a similar level of earnings per share show the following trend

Two companies in the same industry, that generate the same amount of sales, and a similar level of earnings per share show the following trend in their P/E ratio:

Company	PE 2018	PE 2019	PE 2020(e)	PE Industry Average
A	4.5	20	50	5.5
B	4.5	6	8

What is your interpretation of these numbers?

If you have to buy one of them, which one will you choose? why?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Need the following info with explanations as soon as possible. using the attached 10K Prepare a horizontal analysis of your company's Income Statement over the past two years. Calculate the following...

Stock valuations in Canada, a peripheral studyArguably, the single most important skill investors can learn is how to value a stock. Without this proficiency, investors cannot independently discern...

Apple Inc Week Arabast 2-South in A+ Share CNA-AA 1 1 MAC AaBb C AL AGAMA ISLAME Week 3: Ratio Analysis Project Purpose: Ratio analysis is helpful in making business decisions and determining...

Apple Inc is my company of choice Week Arabast 2-South in A+ Share CNA-AA 1 1 MAC AaBb C AL AGAMA ISLAME Week 3: Ratio Analysis Project Purpose: Ratio analysis is helpful in making business decisions...

D-Tech UK Ltd is a company based in Manchester, United Kingdom, established in 2010. The company specializes in manufacturing cutting-edge electronic devices. Despite encountering challenges such as...

please help! Please answer all of the questions below and show as much work as possible. 1) What is the difference between Earnings per Share and P/E ratio? What do they measure? (10pts) Here is some...

(1) Financial Ratios Referencing this week?s readings and lecture, what are the limitations of financial ratios? Classify your answer into at least the following categories: liquidity ratios,...

This is on the Lowes company. Please let me know if you have any questions. I was having issues sending you some work last week. Just to give you a heads up. Respond to one or more question(s) from...

http://www.sec.gov/Archives/edgar/data/1019849/000155837016003547/pag-20151231x10k.htm Respond to one or more question(s) from each of the three categories below. Category: Capital stock 1. Describe...

10-K: https://www.sec.gov/ix?doc=/Archives/edgar/data/789019/000156459020034944/msft-10k_20200630.htm#ITEM_8_FINANCIAL_STATEMENTS_AND_SUPPLEM Based on the Microsoft Corporation's SEC 10-K report,...

A study was done before the recent surge in gasoline prices to compare the cost to drive 25 miles for different types of hybrid vehicles. The cost of a gallon of gas at the time of the study was...

An object's momentum is its mass multiplied by its velocity. Write a program that accepts an object's mass (in kilograms) and velocity (in meters per second) as inputs, and then outputs its momentum....

The disposition effect refers to Group of answer choices the underreaction of investors to bad news. selling your winners while holding your losers. the urge to sell all your securities when market...

Code the following in Python 2.x: upc.py: UPC validation [15 points] UPC-A codes are used on packaging to identify products; when you go to the grocery, the barcode scanned by the cashier is,...