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10 Things They Don't Tell You About Stocks

Many Happy Returns

CHAPTER

The Flaws of the Price to Earnings Ratio

This chapter explores the limitations of the price to earnings ratio (P.E. ratio) when analyzing individual stocks, as it does not consider a company's debt. Instead, they suggest using the enterprise value, which takes into account the market cap, debt, and cash of a company, providing a fuller picture for valuation.

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