Smolira Golf has 13,000 shares of common stock outstanding, and the market price
ID: 2612657 • Letter: S
Question
Smolira Golf has 13,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2014 was $76.
What is the price-earnings ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the price-sales ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What are the dividends per share? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
What is the market-to-book ratio at the end of 2014? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Some recent financial statements for Smolira Golf, Inc., follow.Explanation / Answer
Requirement 1:
Calculation of price-earnings ratio:
Price-earning ratio = Market Price / Earning per share
Market Price
$ 76.00
Earning per share = Net Income / Number of shares =35285/ 13000
$ 2.71
Price-earning ratio = 76 /2.71
28.00
Times
Requirement 2:
Calculation of price-sales ratio:
Price-sale ratio = Market Price / Sales per share
Market Price
$ 76.00
Sales per share = Total Sales / Number of shares =187170/ 13000
$ 14.40
Price-earning ratio = 76 /14.40
5.28
Times
Requirement 3:
Calculation of Dividend Per Share
Dividend per share = Total Dividend / Number of shares =11895 / 13000
$ 0.92
Requirement 4:
Calculation of market-to-book ratio:
Market to Book ratio = Market Price / Book Value per share
Market Price
$ 76.00
Book Value per share = Owners’ equity / Number of shares =76539/ 13000
$ 5.89
Market to Book ratio = 76 /5.89
12.91
Times
Requirement 1:
Calculation of price-earnings ratio:
Price-earning ratio = Market Price / Earning per share
Market Price
$ 76.00
Earning per share = Net Income / Number of shares =35285/ 13000
$ 2.71
Price-earning ratio = 76 /2.71
28.00
Times
Requirement 2:
Calculation of price-sales ratio:
Price-sale ratio = Market Price / Sales per share
Market Price
$ 76.00
Sales per share = Total Sales / Number of shares =187170/ 13000
$ 14.40
Price-earning ratio = 76 /14.40
5.28
Times
Requirement 3:
Calculation of Dividend Per Share
Dividend per share = Total Dividend / Number of shares =11895 / 13000
$ 0.92
Requirement 4:
Calculation of market-to-book ratio:
Market to Book ratio = Market Price / Book Value per share
Market Price
$ 76.00
Book Value per share = Owners’ equity / Number of shares =76539/ 13000
$ 5.89
Market to Book ratio = 76 /5.89
12.91
Times
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