The following information pertains to Sampson Company. Assume that all balance s
ID: 2376377 • Letter: T
Question
The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets:
Cash and short term investments: $45,000
Accounts receivable (net): 25,000
Inventory: 20,000
Property, plant and equipment: 210,000
Total assets: 300,000
Liabilities and Stockholder's Equity:
Current Liabilities: $50,000
Long term liabilities: 90,000
Stockholders' equity-common: 160,000
Total Liabilities and Stockholder's Equity: $300,000
Income Statement:
Sales: $120,000
Cost of goods sold: 66,000
Gross Profit: 54,000
Operating Expenses: 18,000
Net Income: 36,000
Number of Shares of Common Stock: 6,000
Market Price of common stock: $33
Dividends per share: 0.50
What is the price earnings ratio for Sampson?
a. 5.5 times
b. 1.1 times
c. 6 times
d. 6.6 times
Explanation / Answer
b. 1.1 times
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