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?he P/E (price to earnings) ratio show us the expected price of a stock based on...

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Accounting

?he P/E (price to earnings) ratio show us the expected price ofa stock based on its earnings. Investors tend to invest in acompany with a high P/E ratio and buy its shares. On the otherhand, reported earnings are often reconstructed by the companies byusing some accounting techniques in order to attract investors.Which are those accounting techniques which can artificially helpcompanies change the P/E ratio trend line?

Answer & Explanation Solved by verified expert
4.1 Ratings (899 Votes)
The accounting techquines which can artificially help companies change the pe ratio trend line are as follows 1 The pe ratio can be calculated by different formulas that they can change the pe ratios with different interpretation and those formulas are Pe    See Answer
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