Which of the following indicates that a firm has good-quality earnings? A. Increasing P/E ratio B....

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Which of the following indicates that a firm has good-quality earnings? A. Increasing P/E ratio B....

Which of the following indicates that a firm has good-quality earnings?

A. Increasing P/E ratio

B. Increasing P/FCF ratio

C. Increasing P/BV ratio

D. FCF is greater than EPS

business finance

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Answer 1

Answer #1

The answer is

A.Increasing P/E Ratio

P/E Ratio = Price per share/Earnings per share

An increase in P/E Ratio indicates quality earnings and high future potential

P/FCF Ratio is Price per share/Free cash flow per share

P/BV is price per share/Book value per share

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Answer 2

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