sir,
1. is better to have high or low p/e
or is it better to have high or low eps
2. IF p/e is high what does that indicate and IF it is low then what does it indicate to the business.
similarly For eps the impact of it being high and at low?
Ask the Tutor ACCA AFM
P/E and EPS
4y ago#1A higher PE suggests that shareholders are expecting higher growth in the future. It is too simplistic in Paper AFM to just say that it is better or worse. It needs comparison with similar companies and consideration of whatever other factors are mentioned in the question.
A higher EPS is always going to be desirable for shareholders.
There is no 'trade-off' between the two. Shareholders will always prefer the EPS to be higher and will always be wanting higher future growth.
ok sir, thanks
4y ago#3You are welcome :-)
This topic is locked — no new replies.