In my last video, I looked at the price/earnings ratio (PER), which is probably the best-known investment ratio.
However, the PER has several flaws – the biggest of which is it doesn’t take a company’s debt situation into account. The EV/ebit ratio does reflect a company’s debt, so in this video I explain how the EV/ebit ratio works.
• See also: Why the price/earnings ratio is flawed
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