Question

The financial statements of Friendly Fashions include the following selected data (in millions): ($ in millions except share data) 2021 2020 Sales $ 9,643 $ 10,734 Net income $ 260 $ 778 Stockholders' equity $ 1,730 $ 2,270 Average Shares outstanding (in millions) 655 - Dividends per share $ 0.36 - Stock price $ 5.80 - Required: Calculate the following ratios for Friendly Fashions in 2021. (Enter your Dividend yield and Price-earning ratio values to 2 decimal places. Enter your answers in millions (i.e. 5,500,000 should be entered as 5.5).)The financial statements of Friendly Fashions include the following selected data (in millions): ($ in millions except share

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Solution:

Friendly Fashions
Choose Numerator / Choose Denominator
Return on Equity
Net Income / Average stockholder's equity = Return on Equity
$260.00 $2,000.00 13.00%
Dividend Yield
Dividends per share / Market price per sahre = Dividend yield
$0.36 $5.80 6.21%
Earning per share
Net Income / Average shares outstanding = Earning per share
$260.00 $655.00 $0.40
Price earning ratio
Market price per share / Earning per share = Price earning ratio
$5.80 $0.40 14.50
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