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1.
An advantage to using the price/sales ratio is that sales are cut-and-dried.
True. Sales are more straightforward and harder to manipulate than earnings.
2.
How would you turn a price/earnings ratio into an earnings yield?
Invert it. Earnings yield can be gotten by inverting the price/earnings ratio.
3.
The formula for cash return is free cash flow plus net interest expense, the sum of which is then divided by _______.
Enterprise value. Enterprise value is the figure that goes into the denominator.
4.
In a price/book ratio, what exactly is the "price" part of it?
The stock's market price. The price is the market price, while the "book" part is the book value of a share.
5.
The value of a stock's price/earnings ratio could be described as _______.
How much you are willing to pay for the company's earnings. This is what P/E boils down to, practically speaking. The higher the P/E ratio, the more that you are generally willing to pay for the earnings that the company generates.
6.
What would a stock dividend yield of 0% tell you?
The company is not paying any dividend at all. If you have a zero on the top half the formula, where the annual dividends per share go, then no dividend is being paid.
7.
A company's price/earnings growth ratio uses _______.
Future estimates. The price/earnings growth ratio is used to get a sense of what a company will be like in the future.
