Amounts are in thousands of dollars (except number of shares and price per share

Question

Amounts are in thousands of dollars (except number of shares and price per share) Kiwi Fruit Company Balance Sheet Cash and equivalents Operating assets Property, plant, and equipment Other assets Total assets $500 820 3,200 195 4,715 1,040 1,505 205 Current liabilities Long-term debt Other liabilities Total liabilities Paid in capital Retained earnings Total equity Total liabilities and equity 425 1,540 $1,965 4,715 Kiwi Fruit Company Income Statement Net sales Cost of goods sold Gross profit Operating expense Operating income Other income Net interest expense Pretax income Income tax $ 11,300 9,900 $1,400 460 940 190 200 930 280 650 Net income Earnings per share Shares outstanding Recent price $1.25 520,000 45.50

Explanation / Answer

a.

Market value of equity = 520,000 × $45.50

= $23,660,000.

Book Value of equity = $1,965,000

Price Book ratio = $23,660,000 / $1,965,000

= 12.04

Price book ratio is 12.04.

b.

Price Earnings ratio = Value of total equity / Net Income

= $23,660,000 / $650,000

= 36.40.

Price earnings ratio is 36.40.

c.

Price cash flow ratio = Value of total equity / Net increase in cash

= $23,660,000 / $406,000

= 58.28

Price cash ratio is 58.28.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.