Homework Answers
| Earnings per share | $ 7.39 | |
| Current ratio | 3.74 | |
| Quick ratio | 1.29 | |
| Cash ratio | 0.40 | |
| Price/earnings ratio | 5.82 | |
| Dividend yield ratio | 25.58 | % |
Working:
Earnings per share = Net income/Average number of common shares
outstanding = $30500/4125 = $7.39
Current ratio = Current assets/Current liabilities = $65500/$17500 = 3.74
| Current assets: | |
| Cash | 7000 |
| Accounts receivable (net) | 15500 |
| Inventory | 43000 |
| Total current assets | 65500 |
Quick ratio = Quick assets/Current liabilities = ($65500 - $43000)/$17500 = $22500/$17500 = 1.29
Cash ratio = Cash/Current liabilities = $7000/$17500 = 0.40
Price/earnings ratio = Market price/Earnings per share = $43/$7.39 = 5.82
Dividend yield = Dividends paid/Market price = $11.00/$43 = 25.58%
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