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Earnings per Share: It is a mandatory term to be reported with the financials of a company in the annual report. It reflects the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.
Price/Earnings Ratio: It depicts the relation of market price of a share to earnings per share of that company. The price/earnings ratio shows the market value of the amount invested to earn $1 by a company. It is a major tool to be used by investors before the decisions related to investments in a company.
1.
To Compute: The earnings per share of company A for 2018.
2.
To Compute: The price/earnings ratio of company A for 2018.
3.
To Analyze: Earnings per share and price/earnings ratio for 2018.
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Chapter 17 Solutions
Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)
- choose best answerarrow_forwardConsider the following information for a particular company and calculate the gross profit percentage. Sales Cost of goods sold Beginning inventory Ending inventory Beginning accounts receivable $29,100,120 $21,225,000 55,612 53,644 2,279,112 Beginning allowance for bad debts (125,560) Ending accounts receivable 2,345,591 Ending allowance for bad debts (113,824)arrow_forward5 PTSarrow_forward
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