Question

Ames, Inc., has a current stock price of $43.00. For the past year, the company had net income of $6,550,000, total equity of $21,640,000, sales of $39,600,000, and 4.7 million shares of stock outstanding.

What are earnings per share (EPS)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Earnings per share $

What is the price?earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Price?earnings ratio times

What is the price?sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Price?sales ratio times

What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Book value per share $

What is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Market-to-book ratio times

Answer 1

Answer:

Earnings per share = $1.39

Price to earnings ratio times  = 30.94 times

Price to sales ratio times  = 5.10 times

Book value per share = $4.60

Market-to-book ratio times = 9.35 times

Explanation:

Earnings per share = Net Income / Number of shares

Earnings per share = $6,550,000 / 4,700,000

Earnings per share = $1.39

Price to earnings ratio times  = Share Price per share / Earning per share

Price to earnings ratio times  = $43 / $1.39

Price to earnings ratio times  = 30.94 times

Price to sales ratio times  = Stock Price  / Sales

Price to sales ratio times  = (4,700,000 x $43 ) / $39,600,000

Price to sales ratio times  = $202,100,000 / $39,600,000

Price to sales ratio times  = 5.10 times

Book value per share = Total equity / Number shares

Book value per share = $21,640,000 / 4,700,000

Book value per share = $4.60 per share

Market-to-book ratio times = Market value / Book value

Market-to-book ratio times = $43 / $4.60

Market-to-book ratio times = 9.35 times