QUALITY OF EARNINGS
25 May 2016 By PDSNETThe quality of a company's earnings is measured by their consistency. An earnings growth of about 15% per annum is ideal from an investors viewpoint. If a company can sustain this for many years, even during recessions, then its earnings flow will be very highly rated and that will result in its share price being high in relation to its earnings - which can be seen in the P:E ratio and the earnings yield.
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