Why might an analyst prefer to use a measure of cash flow generating ability such as earnings

Question:

Why might an analyst prefer to use a measure of cash flow generating ability such as earnings instead of sales in relative valuation?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

The Theory And Practice Of Investment Management

ISBN: 9780470929902

2nd Edition

Authors: Frank J Fabozzi, Harry M Markowitz

See More Books

Question Posted: Dec 19, 2023 01:35 AM

See More Questions

READ THE FOLLOWING ARTICLE AND THEN WRITE A SUMMARY AND DESCRIBE WHICH VALUATION METHOD DISCUSSED IN THE ARTICLE YOU FIND TO BE MOST EFFECTIVE AND WHY. Write a minimum of 400 words. When trying to...
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
An alternative hypothesis states that a newly developed drug is better than the one currently used to treat a serious illness. If we reject H0, the new drug will be prescribed instead of the current...
Suppose the comparative balance sheets of Sage Hill Inc.. are presented here. SAGE HILL INC. Condensed Balance Sheet May 31 ($ in millions) 2019 2018 Assets Current Assets $9,680 $8,760 Property,...
An employee of JHT Holdings, Inc., a trucking company, was responsible for resolving roadway accident claims under $25,000. The employee created fake accident claims and wrote settlement checks of...
In Exercises find the one-sided limit (if it exists). lim x-(1/2)- x X sec TX
According to an article in the Economist magazine, in 2023, the legal minimum wage in Venezuela was 130 bolivars per month, and the inflation rate during 2023 was expected to be 500 percent. How many...
Sako Companys Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Sako Company has a Hi-Fi Division that could use...
4.Indicate, by clicking on the relevant boxes, whether the following statements are true or false in relation to business valuation. The earnings yield method and the dividend growth model should...
To what extent is the procedure for valuation based on discounting cash flows and valuation by multiples similar?
Why would an analyst use a multiphase dividend discount model?
A random sample of complaints about American airlines was drawn and the type of complaint was recorded (1 = Flight problems (cancellations, delays, etc.), 2 = Customer service (unhelpful employees,...
1. Compute the lower of cost or market for the Inventory applied separately to each item. 2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to...
In this problem we assume the market portfolio is the S&P 500 index. The top 5 stocks in the S&P 500 index, when ranked by market capitalization, make up 22% of the total market capitalization of the...
Were the public relations tactics of the food industry ethical? Why or why not? The public relations practices of the food industry were not ethical in this video. The industry used deceptive...
Calculate the owners equity: Home purchase price = $ 5 0 0 , 0 0 0 Bank mortgage = $ 4 0 0 , 0 0 0 Personal cash investment = $ 1 0 0 , 0 0 0
Read the scenario below, and help me in wriitng direct request to Morgan DiMallano, Pegasus Treasures. The company is located in Toronto at 3852 Eglinton East. The postal code is M1N 7C3. Inquire...
A construction company has total revenues of $1,150,000, total construction costs of $956,000, and general overhead costs of $159,000 for the year. Determine the companys total profit for the year...
The pendulum consists of two rods: AB is pin supported at A and swings only in the y-z plane, whereas a bearing at B allows the attached rod BD to spin about rod AB. At a given instant, the rods have...
Briefly describe your own beliefs about the potential value of low-energy compact fluorescent lightbulbs, your attitude toward them, and your intention about buying one the next time you need to...
Give an example of a recent purchase experience in which you were dissatisfied because a firms marketing mix did not meet your expectations. Indicate how the purchase fell short of your expectations...
Explain psychographics and lifestyle analysis. Explain how they might be useful for planning marketing strategies to reach college students, as opposed to average consumers.
Candices lactose-H 2 breath test (which involves measuring H 2 gas in the breath after ingesting 50 g lactose) was positive. Why? What is the fecal osmolar gap? Why was Candices fecal osmolar gap...
What is the role of esophageal peristalsis in normal swallowing? In a normal swallow, what events occur in the LES, and what is the timing of these events? What is the innervation of the LES, and...
Why was Charlotte light-headed? Why did Charlotte experience tingling and numbness of her feet and hands? How did breathing into and out of a paper bag correct Charlottes acidbase disorder?

Why might an analyst prefer to use a measure of cash flow generating ability such as earnings

Question:

Step by Step Answer:

An analyst might prefer to use a measure of cash flow generating ability such as earnings instead of sales in relative valuation for several reasons 1 ...View the full answer

The Theory And Practice Of Investment Management

Students also viewed these Business questions