Earnings per share:
Earnings per share is ratio suggest the earnings made by the corporation on a per share basis. The earnings per share can be computed by dividing the total earnings available f or common stockholders by total number of shares outstanding.
The net income for common stockholders is computed by deducting the preferred dividend commitment as well. The number of shares outstanding is computed by reducing the shares held as
Price Earnings ratio:
Price earnings ratio is a measure of number of times the market price is as compared to earnings per share. The PE ratio is computed to know the performance of shares of the corporation.
Requirement1:
The Earning per share to be computed.
Requirement2:
The price earning ratio to be computed.
Want to see the full answer?
Check out a sample textbook solution
Chapter 13 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education