One concern when screening for stocks with low price-to-earnings ratios is that companies with low P/Es may be fi nancially weak. What criterion might an analyst include toavoid inadvertently selecting weak companies?A . Net income less than zeroB . Debt-to-total assets ratio below a certain cutoff pointC . Current-year sales growth lower than prior-year sales growth
One concern when screening for stocks with low price-to-earnings ratios is that companies with low P/Es may be fi nancially weak. What criterion might an analyst include toavoid inadvertently selecting weak companies?A . Net income less than zeroB . Debt-to-total assets ratio below a certain cutoff pointC . Current-year sales growth lower than prior-year sales growth
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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One concern when screening for stocks with low price-to-earnings ratios is that companies with low P/Es may be fi nancially weak. What criterion might an analyst include to
avoid inadvertently selecting weak companies?
A . Net income less than zero
B . Debt-to-total assets ratio below a certain cutoff point
C . Current-year sales growth lower than prior-year sales growth
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