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Learning to Invest / Terms, Definitions, & Jargon


Subject:  Enterprise value Date:  2/20/2004  9:22 AM
Author:  mjuliov Number:  1323 of 2244

I am new to investing.

In Matt Richey's article "Two with hidden value" he says,

> Years to Payback: The EV/FCF ratio tells you how many years it will
> take to get payback on your investment (assuming no growth or decline
> in free cash flow).
It seems to me that "your investment" is not EV, because that is not the price you will actually pay for the shares, so that "years to payback" is more accurately reflected by the P/E ratio.

I am missing something?

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