Thursday, March 6, 2008

New Video on Earnings at the Saving and Investing Channel on YouTube

Earnings can be one input into the valuation of a company, but as a standalone indicator, and when used for example in a P/E ratio, this can lead to conclusions that are not that solid. This is partly because earnings are an accounting result, but also because they can be very volatile - particularly if revenues and/or costs change quickly.

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