Can you explain the correct methodology to solve this financial accounting problem? Euronext Al Corp. is an emerging tech company withnegative earnings. The company's annual sales are$8.4 million, and there are 420,000 sharesoutstanding. If the benchmark price-to-sales ratio is3.8, what is your estimate of an appropriate stockprice?

Step 1: Definition of Price-to-Sales Ratio The price-to-sales (P/S) ratio is a valuation metric that…

Answered: Euronext Al Corp. is an emerging tech…

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

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Euronext Al Corp. is an emerging tech company with negative earnings. The company's annual sales are $8.4 million, and there are 420,000 shares outstanding. If the benchmark price-to-sales ratio is 3.8, what is your estimate of an appropriate stock price?