NO.PZ201512300100001104
问题如下:
4. Cannan’s preference to use the P/E ratio over the P/S ratio is best supported by:
选项:
A.Reason 1
B.Reason 2
C.Reason 3
解释:
C is correct.
The price to sales (P/S) ratio fails to consider differences in cost structures. Also, while share price reflects the effect of debt financing on profitability and risk, sales is a pre-financing income measure and does not incorporate the impact of debt in the firm’s capital structure. Earnings reflect operating and financial leverage, and thus the price-to-earnings (P/E) ratio incorporates the impact of debt in the firm’s capital structure.
为什么不选reason 2?