Breaking Down The PIA Ratios --Dickeson

Secondly, we're talking "Net Profits" here. If you believe Net Profits mean something, please reveal all to me. Since Enron, Global Crossing and even before those disasters, net profits were a fantasy.

Mostly Ronnie Davis and the rest of us speak a language called EBITDA or some variant thereof. (Earnings Before Interest, Taxes, Depreciation and Amortization. Please note that the word "profits" has vanished.) Now the stock market doesn't believe that even EBITDA represents the value of a company so it multiplies EBITDA by a number called a P/E ratio—a "predictor" of future earnings—to arrive at a value of the equity of a company. Divide that result by the number of outstanding shares to determine a share value. What does that have to do with "Net Profits?" Nada.