Question

Some recent financial statements for Smolira Golf, Inc., follow.

SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2015 and 2016
	2015				2016					2015				2016
Assets									Liabilities and Owners’ Equity
Current assets									Current liabilities
Cash	$	3,181			$	3,257			Accounts payable	$	2,158			$	2,610
Accounts receivable		4,762				5,771			Notes payable		1,755				2,126
Inventory		12,498				13,772			Other		91				108
Total	$	20,441			$	22,800			Total	$	4,004			$	4,844
									Long-term debt	$	13,300			$	16,060
									Owners’ equity
									Common stock and paid-in surplus	$	38,500			$	38,500
Fixed assets									Accumulated retained earnings		15,659				39,185
Net plant and equipment	$	51,022			$	75,789			Total	$	54,159			$	77,685
Total assets	$	71,463			$	98,589			Total liabilities and owners’ equity	$	71,463			$	98,589

SMOLIRA GOLF, INC. 2016 Income Statement
Sales			$	187,570
Cost of goods sold				126,303
Depreciation				5,323
EBIT			$	55,944
Interest paid				1,420
Taxable income			$	54,524
Taxes				19,083
Net income			$	35,441
Dividends	$	11,915
Retained earnings		23,526

Smolira Golf has 11,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2016 was $78.
  
What is the price–earnings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Price–earnings ratio             times
  
What is the price–sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Price–sales ratio             times
  
What are the dividends per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Dividends per share            $
  
What is the market-to-book ratio at the end of 2016? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Market-to-book ratio             times

Answer 1

Answer to Part 1:

Price-Earnings Ratio = Price per Share / Earnings per Share
Price per Share = $78
Earnings per Share = Net Income / Common stock Outstanding
Earnings per Share = 35,441 / 11,000
Earnings per Share = $3.221909

Price-Earnings Ratio = $78 / $3.221909
Price-Earnings Ratio = 24.21 times

Answer to Part 2:

Price- Sales Ratio = Price per Share/ Sales per Share
Price per Share = $78
Sales per Share = Total Sales / Common Stock Outstanding
Sales per Share = $187,570 / 11,000
Sales per Share = $17.051818

Price- Sales Ratio = $78 /$17.051818
Price- Sales Ratio = 4.57 times

Answer to Part 3:

Dividend per Share = Dividend Paid / Common Stock Outstanding
Dividend per Share = $11,915 / 11,000
Dividend per Share = $1.08

Answer to Part 4:

Market to Book ratio = Market Price per Share / Book Price per Share
Market Price per Share = $78
Book Price per Share = Total Equity / Common Stock Outstanding
Book Price per Share = $77,685 / 11,000
Book Price per Share = $7.062273

Market to Book ratio = $78 / $7.062273
Market to Book ratio = 11.04 times