Multiple questions
QWhat’s a stock’s “multiple”? — D.W., Naples, Florida
AIt’s a ratio of two measures of a company. One of the most common multiples is the price-to-earnings (P/E) ratio, which is the stock’s current price divided by its earnings per share. Imagine Scruffy’s Chicken Shack (ticker: BUKBUK), trading at $80 per share. If it earned $4 per share over the past year, its P/E is 20 (80 divided by 4). It’s trading at a P/E ratio of 20.
There are also priceto-sales multiples, bookvalue multiples, cashflow multiples and more. It can be helpful to compare a company’s multiples with those of its peers, to see whether its stock appears to be undervalued or overvalued. Nike, for example, recently sported a P/E ratio that was over 82, while Adidas’ was not quite 41. That suggests that Adidas is more attractively priced, though of course you’d want to assess many more factors.
QWhat’s the difference between a private company and a public one?
— C.B., Bozeman, Montana
APublic companies have shares of stock available to trade on the open markets. They’re required to file quarterly earnings reports with the Securities and Exchange Commission, detailing revenue, expenses, debt loads, cash levels, taxes, income or losses — and much more. These reports are publicly available.
Privately held companies are not public — meaning average investors can’t buy shares of them. They also don’t have to reveal much about their operations and financial health. According to Forbes, the 100 biggest private companies in America include Koch Industries, Cargill, Deloitte, Pricewaterhousecoopers, Publix, Mars, H-EB, Pilot Flying J, Enterprise Holdings (parent of the car-rental company), Bechtel, Cox Enterprises, Fidelity Investments, Bloomberg, SC Johnson, Mckinsey & Company, Staples and Amway.
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Travel abroad can be greatly enhanced if you take the time to learn the language spoken at your destination — and knowing at least one other language can also be an effective career booster, as lots of companies have (or want to have) international operations and may send employees to other countries.
Travel can boost your self-confidence, as you navigate unfamiliar locations and successfully deal with unexpected events (such as missing a train in Japan). Finally, travel can simply be fun and exciting, and it creates memories to look back on for the rest of your life.