Thursday, September 15, 2011

New Video: V2D. Illustrated Shortcomings of the P/E Ratio (and other ratios)

The P/E ratio has numerous shortcomings - some of which relate to how earnings are calculated, and some of which relate to the nature of looking at one year's data (as the other ratios like EV/EBITDA and P/Sales) do as well. This video illustrates in brief issues that relate to looking at one year of data.

New Video: 10C. Gross Margin, Operating Margin and Net Margin

This video looks at the Income statement in a bit more detail - and in particular, looks at the gross, operating and net margins and what they can tell us about how the company makes money, its efficiency, and how these margins can be used to compare companies.