Pecunious Products, Incorporated’s financial results for the past three years are summarized below: Year 3 Year 2 Year 1 Sales trend 128.0 115.0 100.0 Current ratio 2.5 2.3 2.2 Acid-test ratio 0.8 0.9 1.1 Accounts receivable turnover 9.4 10.6 12.5 Inventory turnover 6.5 7.2 8.0 Dividend yield 7.1% 6.5% 5.8% Dividend payout ratio 40% 50% 60% Dividends paid per share* $ 1.50 $ 1.50 $ 1.50 *There have been no changes in common stock outstanding over the three-year period. Required: Your boss has asked you to review these results and then answer the following questions: Is the earnings per share increasing or decreasing? Is the price-earning ratio going up or down?
Pecunious Products, Incorporated’s financial results for the past three years are summarized below: Year 3 Year 2 Year 1 Sales trend 128.0 115.0 100.0 Current ratio 2.5 2.3 2.2 Acid-test ratio 0.8 0.9 1.1 Accounts receivable turnover 9.4 10.6 12.5 Inventory turnover 6.5 7.2 8.0 Dividend yield 7.1% 6.5% 5.8% Dividend payout ratio 40% 50% 60% Dividends paid per share* $ 1.50 $ 1.50 $ 1.50 *There have been no changes in common stock outstanding over the three-year period. Required: Your boss has asked you to review these results and then answer the following questions: Is the earnings per share increasing or decreasing? Is the price-earning ratio going up or down?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Topic Video
Question
Pecunious Products, Incorporated’s financial results for the past three years are summarized below:
|
|
Year 3 |
Year 2 |
Year 1 |
|
Sales trend |
128.0 |
115.0 |
100.0 |
|
Current ratio |
2.5 |
2.3 |
2.2 |
|
Acid-test ratio |
0.8 |
0.9 |
1.1 |
|
Accounts receivable turnover |
9.4 |
10.6 |
12.5 |
|
Inventory turnover |
6.5 |
7.2 |
8.0 |
|
Dividend yield |
7.1% |
6.5% |
5.8% |
|
Dividend payout ratio |
40% |
50% |
60% |
|
Dividends paid per share* |
$ 1.50 |
$ 1.50 |
$ 1.50 |
*There have been no changes in common stock outstanding over the three-year period.
Required:
Your boss has asked you to review these results and then answer the following questions:
Is the earnings per share increasing or decreasing? Is the price-earning ratio going up or down? (pls expound)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education