Question

Khaki Republic sells clothing and accessories through premium outlet locations and online. Selected financial data for Khaki Republic is provided as follows: ($ in millions except share data) Sales $ 4,158 Net income $ 144 Stockholders’ equity, beginning $ 1,890 Stockholders’ equity, ending $ 1,931 Average shares outstanding (in millions) 85.6 Dividends per share $ 0.75 Stock price, ending $ 47.23 Required: Calculate the following ratios for Khaki Republic.

(Enter your net income and average stockholders' equity answers in millions (i.e., 5,000,000 should be entered as 5). Round your answers to 2 decimal places.)

It wont let me post a picture but it says these are the choices for the fill in the blank

• Average assets
• Average liabilities
• Average stockholders’ equity
• Dividends per share
• Earnings per share
• Net income
• Net loss
• Stock price

Return on equity

___(fill in the blank with words)_________________ /(divided by) ____________ = return on equity

____(fill in the blank with numbers)______________ ______________ = ___________

Dividend yield

_____word__________ _________________ = dividend yield

______number________ __________________= ________________

Price earning ratio

_________word______________ ___________________= price ratio

________number____________ __________________= ______________

Answer 1

(1)

Return on equity = net income/average stockholders equity

= $144/$1910.50

= 7.54%

where,

average stockholders equity = ($1890 + $1931)/2 = $1910.50

(2)

Dividend yield = dividend per share/market price per share

= $0.75/$47.23

= 1.59%

(3)

Price-earning ratio = market price per share/earning per share

= $47.23/$1.68

= 28.11 times

where,

earning per share = $144/85.6 = $1.68