Nice info.

But nowadays I follow the cash flow. Revenue is one thing, collection is another.

Quite a few examples of high revenue and EPS but at last, collection is unclear and company have to correct their accounts as losses.

Muhibbah was one of the few unfortunate examples of OnG company thought to be very fortunate to have landed a huge contract in the Johor Oil Terminal project only to see the project fail. Revenue/profit has already been recorded in their books, now only waiting to see how much they have to writeback as losses once the administration of the project finances is done.

Last time Dubai financial collapse also claimed a popular KLSE company heavily concentrated in Dubai projects. Lots of revenue but at last when Dubai go holland, their receivables were unable to be converted to cash and at last de-listed in shambles.

PER is based on EPS whether future or past. But EPS is based upon revenue/profit, which does not take into consideration of whether cash is received or not. So a company can claimed it received over Rm10 bil revenue by just providing a simple receipt and then minusing their cost of operation and announced a record profit and EPS. But no money is seen.

Example:

Company A
EPS 100
PER 3x
EPS Growth 20% PA
Revenue growth 20% PA

Is the above company good? It's only good if the operational cash collection is acceptable. Meaning their sales actually can be converted into cash and not stay in their 'receivable' bracket for the longest time and the company survive only on loans/overdraft.

IMO anyway.