| Michael Wilson | Wednesday, September 18, 2013 - 06:56 am 
Is it true that having high taxes like 40% and above affects both p/e and value of the corporation? I recently changed it back to 35% and I will give that a go. Im sure profit transfer doesn't affect it?
Thanks for any in put for the reply. |
| Space313 | Wednesday, September 18, 2013 - 07:05 am
Yeah, it does. P/E measures the profitability of a corporation, not the gross income. This is AFTER all the taxes and profit transfer. As you increase taxes/profit transfer, the P/E will increase as well. The lower the P/E, the more profitable a corporations is. I keep taxes from 5%-10%, and Profit at 25%, if you want some CEO's get high welfare, and low taxes, good luck! |
| Michael Wilson | Wednesday, September 18, 2013 - 01:32 pm
Oh cool, that's what I thought, thank you. |
| thewhy | Thursday, September 19, 2013 - 01:35 am
taxes affect market value.... profit sharing does not |
| Michael Wilson | Thursday, September 19, 2013 - 07:01 am
Thank you, I believe it was the taxes that does affect the value, so Im trying at 25% tax and 95% profit transfer. The corporation still needs a bit of income as well for they're cash flow. |
| Michael Wilson | Thursday, September 19, 2013 - 07:02 pm
Ive changed the strategy to 23% tax and 97% profit and the corporations can have 3% cash flow. It should work though, I think. Now, I have started to realize the difference in p/e ratio when the taxes have dropped. Thank you for your help. |
| Michael Wilson | Wednesday, September 25, 2013 - 01:15 pm
So now I know, the P/E ratio also affects by the Market Situation after all, not just tax because the tax is at 15%. Thanks, at least I know it is about the market fluctuations. |
| Robot Elvis | Saturday, September 28, 2013 - 03:39 am
this is kind of an aside, but something is wrong with the way public corp value is being calculated. i suddenly have multiple corps that are worth over 25T and some of them are consistently making losses. |
