Makers Corp. had additions to retained earnings for the year just ended of $359,

Question

Makers Corp. had additions to retained earnings for the year just ended of $359,000. The firm paid out $181,000 in cash dividends, and it has ending total equity of $4.86 million. The company currently has 150,000 shares of common stock outstanding. What are earnings per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Earnings $ per share What are dividends per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Dividends $ per share What is the book value per share? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Book value $ per share If the stock currently sells for $75 per share, what is the market-to-book ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Market-to-book ratio times What is the price-earnings ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16.) Price-earnings ratio times If the company had sales of $4.59 million, what is the price-sales ratio? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.) Price-sales ratio times

Explanation / Answer

Net Income = Additions to Retained Earnings + Cash Dividends
Net Income = $359,000 + $181,000
Net Income = $540,000

Earnings per share = Net Income / Number of Common Stock Outstanding
Earnings per share = $540,000 / 150,000
Earnings per share = $3.60

Dividends per share = Cash Dividends / Number of Common Stock Outstanding
Dividends per share = $181,000 / 150,000
Dividends per share = $1.21

Book Value per share = Total Equity / Number of Common Stock Outstanding
Book Value per share = $4,860,000 / 150,000
Book Value per share = $32.40

Market-to-book Ratio = Share Price / Book Value per share
Market-to-book Ratio = $75.00 / $32.40
Market-to-book Ratio = 2.31

Price-earnings Ratio = Share Price / Earnings per share
Price-earnings Ratio = $75.00 / $3.60
Price-earnings Ratio = 20.83

Sales per share = Sales / Number of shares outstanding
Sales per share = $4,590,000 / 150,000
Sales per share = $30.60

Price-sales Ratio = Share Price / Sales per share
Price-sales Ratio = $75.00 / $30.60
Price-sales Ratio = 2.45

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