Question

Edelman Engines has $13 billion in total assets. Its balance sheet shows $2.6 billion in current liabilities, $9.1 billion in long-term debt, and $1.3 billion in common equity. It has 700 million shares of common stock outstanding, and its stock price is $47 per share. What is Edelman's market/book ratio? Round your answer to two decimal places.

Answer 1

Solution :

The Market / Book ratio for Edelman's is = 25.31

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

X 27.06.2019.xlsx Microsoft Exc FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW A B D F Statement showing calculation of Market Capitalization 2 Sl.No. Particulars 1 No. of shares of common stock outstanding 3 Amount 4 700,000,000.00 2 Market Stock Price 3 Market Capitalization (1) 5 47.00 $ (2) 6 32,900,000,000.00 7 8 Statement showing calculation of Net Book value 9 Sl.No. Particulars Amount 10 1 Total Assets 11 13,000,000,000.00 2 Less: Current liabilities (2,600,000,000.00) 12 $ 3 Less: Long term debt (9,100,000,000.00) 13 4 Net Book Value (1) - (2)- (3) $ 1,300,000,000.00 14 15 16 Statement showing calculation of Market / Book ratio 17 SI.No. Particulars 18 Amount 1Market Capitalization 19 32,900,000,000.00 2 Net Book Value 20 1,300,000,000.00 3 Market/ Book ratio (1)/ (2) 21 25.31 22 23 24 25 LL