I need the correct answer to this financial accounting problem using the standard accounting approach. Volt Core Systems is an emerging tech company with negativeearnings. The company's annual sales are $4.8 million, and there are300,000 shares outstanding. If the benchmark price-to-sales ratio is4.2, what is your estimate of an appropriate stock price?

Step 1: Definition of Price-to-Sales (P/S) RatioThe Price-to-Sales (P/S) ratio compares a company's…

Answered: Volt Core Systems 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

Problem 2MAD

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Volt Core Systems is an emerging tech company with negative earnings. The company's annual sales are $4.8 million, and there are 300,000 shares outstanding. If the benchmark price-to-sales ratio is 4.2, what is your estimate of an appropriate stock price?