Financial Accounting A company reported net income of $850,000 for thecurrent year. The year-end market price per commonshare was $12 and there were 425,000 weighted-averageshares of common stock outstanding. Calculate thecompany's price-earnings ratio.

Step 1: Define Common stockCommon stock or equity shares represent a share in the capital of the…

Answered: A company reported net income of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 21E

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Franklin Co. reported the following year-end data: net income of $220,000; annual cash dividends per share of $3; market price per (common) share of $150; and earnings per share of $10. Compute the (a) price-earnings ratio and (b) dividend yield.
The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Please see the attachment for details: InstructionsDetermine the following measures for 20Y2, rounding to one decimal place including percentages, except for per-share amounts:1. Working capital2. Current ratio3. Quick ratio4. Accounts receivable turnover5. Number of days’ sales in receivables6. Inventory turnover7. Number of days’ sales in inventory8. Ratio of fixed assets to long-term liabilities9. Ratio of liabilities to stockholders’ equity10. Times interest earned11. Asset turnover12. Return on total assets13. Return on stockholders’ equity14. Return on common stockholders’ equity15. Earnings per share on common stock16. Price-earnings ratio17. Dividends per share of common stock18. Dividend yield
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A company reported net income of $850,000 for the current year. The year-end market price per common share was $12 and there were 425,000 weighted-average shares of common stock outstanding. Calculate the company's price-earnings ratio.