1 Answers: Can anyone guide me on what financial ratios I could use to solve the question below?

Question

The market cap of a stock is often based more upon estimates of future finances than current finances, so the question can only be answered by saying future financial ratios instead of current financial ratios.

People who bought stock in internet companies like Amazon before it started making money were well rewarded. People who bought (and held) stock in General Motors when it had impressive financial ratios lost everything

The future is always uncertain.

The future is always uncertain.

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Anonymous 3 months 1 Answer 21 views 0

Answer ( 1 )

  1. It is very uncertain but it is more of the nature of the market itself. Remember stock prices go up and down based on general market sentiment. Built into that is greed and fear which really sway markets.

    Also don’t think that it is logical. Do you see any logic why TESLA is trading at a high market cap to FORD? There isn’t logic behind the markets. This is why value investing can work so well.

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