CFA Practice Question

There are 201 practice questions for this study session.

CFA Practice Question

If two stocks (A and B) have the same positive P/E, and stock A has a lower P/S, we can conclude that:
A. A has a higher net profit margin.
B. B has a higher net profit margin.
C. We cannot conclude anything as P/S and P/E are unrelated.
Explanation: Net profit margin = E/S = (P/S) / (P/E).

User Contributed Comments 1

User Comment
cminor Member that justified P/S is just Profit Margin x justified P/E
You need to log in first to add your comment.