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One other thing that makes comparison hard is the changes in the tax code. PE ratios in the past were based on certain corporate tax rates, which have been redu
by omgwtfbyobbq 6y ago
One other thing that makes comparison hard is the changes in the tax code. PE ratios in the past were based on certain corporate tax rates, which have been reduced significantly. Something like after tax PE ratio might level the field when comparing PE ratios across time.
- 2arrs2ells 6y agoEarnings are already after tax. That's why EBITDA is EBITDA (earnings before interest, tax, depreciation and amortization).
- omgwtfbyobbq 6y agoThank you! For some reason I thought they were pre-tax. Edit - It seems like adjusting for whatever the fed funds rate is might provide a more accurate comparison. https://www.suredividend.com/interest-rates-valuation/ https://www.suredividend.com/interest-rates-valuation/