Why is the P/E ratio irrelevant during a company's loss-making periods? Option: The company's assets exceed its liabilities, There are no earnings to calculate the ratio, The company's stock price is zero, The company's book value is negative

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Why is the P/E ratio irrelevant during a company's loss-making periods?

The company's assets exceed its liabilities

There are no earnings to calculate the ratio

The company's stock price is zero

The company's book value is negative

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What does the P/E ratio help investors understand?

"The market price of a share in relation to the company's earnings"

"The book value of a company's assets relative to its market value"

"The profitability of a company compared to its stock price"

"The company's debt level compared to its equity"

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What does the P/E ratio tell an investor?

The efficiency of fund utilization

The bank's spread

The amount of money to invest to earn Re.1 of the company's earnings

The company's book value per share

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What is a potential risk associated with relying solely on the P/E ratio?

Earnings can be manipulated

P/E ratios are difficult to calculate

P/E ratios fluctuate too frequently

P/E ratios are not publicly available

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What is a potential risk of relying solely on the P/E ratio for investment decisions?

"The P/E ratio guarantees future profitability"

"The stock may be undervalued"

"The stock may be overvalued"

"The stock price may be highly stable"

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Why is it crucial to conduct thorough research beyond just considering the P/E ratio?

"P/E ratios provide a complete picture of a company's financials"

"Fundamental analysis is unnecessary for high P/E stocks"

"External factors can influence stock prices, not just company performance"

"High P/E ratios always indicate strong future performance"