Is EV/EBIT A Good Indicator Of Cheapness?

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Today, we are testing a EV/EBIT, which is the market value indicator. As you can on the equation below, it takes market capitalization of the given company and adjusts it to the price, which you need to pay, if you would like to purchase it.

The gauges, that use the Enterprise Value evaluate better the true value of the company, because during the takeover you need to buy back all the company’s shares (common and prefered), pay back the debt, and after that, the cash and cash equivalents will be yours. Therefore it factors in the debt and cash and the luck of this feature is the serious limitation of P/E...