Question

Makers Corp. had additions to retained earnings for the year just ended of $313,000. The firm paid out $177,000 in cash dividends, and it has ending total equity of $4.82 million. The company currently has 140,000 shares of common stock outstanding. What are earnings per share? What are dividends per share? What is the book value per share? If the stock currently sells for $65 per share, what is the market-to-book ratio? What is the price-earnings ratio? If the company had sales of $4.41 million, what is the price-sales ratio?

Answer 1

Calculate different ratios as follows: S313,000.00 $177,000.00 A+B) $490,000.00 $140,000.00 1 Retained Earnings (A) 2 Dividends (B) 3 Earnings available for equity holders (C 4 Number of shares (D) 5 Earnings per share (E-CD) 6 Dividend per share (B/D) 7 Total equity (F) 8 Book value per share ( G= F/D) 9 Market price per share (H) 10 Market to book ratio (H/G) 11 Price earning ratio (I-H/E) 12 Sales (D 13 Sales per share(K-J/D) 14 Price-sales ratio (H/K) 3.50 1.26 $4,820,000.00 DS34.43 S65.00 1.89 18.57 S4,410,000.00 S31.50 2.06

Formulas: 1 Retained Eamings (A) 2 Dividends (B) 3 Earnings available for equity holders (CA+B) SUMB1:B2) 4 Number of shares (D140 5 Earnings per share (E-CD) 6 Dividend per share (B/D) 7 Total equity (F 8 Book value per share ( G FID) 9 Market price per share (H) 10 Market to book ratio (H/G) 11 Price earning ratio (I-HE) 12 Sales () 13 Sales per share(K-JD) 14 Price-sales ratio (HK) 313000 177000 2 B3/B4 -B2/B4 4820000 B7/B4 65 -B9/B8 -B9/B5 4410000 -B12/B4 B9/B13