I have read that p/e does not take debt into account but EV/EBIT does so is a better measure.

However does PE take interest paid on debt into account? I presume it does and earnings are based on the the final profits after all costs (including interest).

This may sound stupid, but if a 2 companies have the same PE but one is paying interest on debt, is that in some ways a good sign? It is making enough profit to get the same PE even though it has the added expense of debt - which is hopefully temporary.

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