Earnings per share:
The earning per share is the profit available for each common stock. It is profitability measure to evaluate the capability of a company to make profit on each stock invested.
Price-earnings ratio:
The price/earnings ratio reports how much dollars an investor has to invest to earn a dollar from the earnings of the company. It is calculated by dividing the market price of the share to earnings per share of the company.
Dividend payout ratio:
The ratio which indicates amount of dividend paid by a company compare to the total net income available for the common stockholders of the company.
Dividend yield ratio:
The dividend yield ratio is the dividend per share paid by the company expressed in percentage over its market price per share. It indicates how much a company is paying as dividend to the common stockholders of the company on each individual stock.
Book value per share:
The value of each individual share ascertained if total assets of the company were sold at carrying value after the creditors are paid off. It is computed by dividing the total stockholders’ equity with number of common stock outstanding.
Compute the following financial data for this year
1. Earnings per share
2. Price-earnings ratio
3. Dividend payout ratio
4. Dividend yield ratio.
5. Book value per share

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Chapter 14 Solutions
Introduction to Managerial Accounting - Connect Access
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