It’s mentioned over here that for a loss making firm we can’t use P/E ratio so we must use earnings yield.
I’ve a question in this regard, earnings yield m bhi toh E will be -ve, right? If the counter is, we take E1 i.e., exp earnings which is +ve then even while computing with the help of P/E we can take E as E1 which we exp to be +ve, can’t we?
Please help. Thank you!
How can you take negative P/E. How will you interpret it. Instead earnings yield can be negative and we can interpret it accordingly.
Ok Udit thanks for responding. You’re correct, it’s not possible to interpret, I was misunderstanding, I thought earnings yield m earnings is taken +ve. Sorry my bad but ya once again thanks for responding.
It’s ok.