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Excerpt from Guru Focus -- "Aswath argues that in the current environment, cash earns a low return. If you were to take cash as a standalone asset, its low return would translate into a high price-earnings (P/E) multiple. In other words, cash does increase a company’s valuation because it produces a terrible return. With this being the case, the professor argues that how the P/E multiple is used should be reconsidered in the current environment. Specifically, he believes 'we have to separate companies into their cash and operating parts, and deal with the two separately because they are so different in terms of risk and earnings power.'"

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