There are multiple problems with this approach in my opinion. First, both depends on the accounting principles, earnings and the capital deployed. PE is a linear function, effects of ROIC are exponential. I would prefer ROIIC, but it is very hard to calculate.
There are multiple problems with this approach in my opinion. First, both depends on the accounting principles, earnings and the capital deployed. PE is a linear function, effects of ROIC are exponential. I would prefer ROIIC, but it is very hard to calculate.