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1. The price-earnings ratio on common stock is calculated as: earnings per share

ID: 2591715 • Letter: 1

Question

1. The price-earnings ratio on common stock is calculated as:

earnings per share of common stock, divided by market price per share of common stock.

dividends per share of common stock, divided by earnings per share on common stock.

market price per share of common stock, divided by earnings per share on common stock.

market price per share of common stock, divided by dividends per share of common stock.

2.

The Cash and Accounts Receivable end-of-year balances for a company are provided below:

Based on this information, what is the amount and percentage of increase or decrease that would be shown with horizontal analysis? Enter a decrease using a minus sign before the amount and the percentage.

Current Year Prior Year Cash $77,128 $62,200 Accounts receivable (net)   56,374   79,400

Explanation / Answer

1 The price-earnings ratio on common stock is calculated as market price per share of common stock, divided by earnings per share on common stock. 2 Amount Percentage Cash 14928 24% Accounts Receivable -23026 -29%