Question

Market Value Ratios Lab R Doors, year-end price on its common stock is $42. The firm has a profit margin of 10.2%, total assets of $32 million, a total asset turnover ratio of 2.20 no preferred stock, and there are 4.2 million shares of common stock outstanding what the ato o·aR boos not round intermediate steps.)

Answer 1

B13c B2/B11 1 Corporate Finance 2 Stock Price 3 Profit Margin 4 Assets 5 Asset Turnover 6 No of Shares o/s 42 10.20% 32000000 2.2 4200000 9 Net Sales 10 Net Income 11 EPS 13 14 15 70400000 B5* B4 7180800 B5 B4 1.7097 B10/B6 .5655 B2/B11 P/E 24

First we use the asset turnover ratio to find out the net sales of the company. Which is,

After that, use the profit margin/Net income margin , to calculate the net income of the firm, By simply multiplying the Profit margin to the sales number.

As get that, we have to calculate the EPS/ Earning per share of the company, Which is

Now that, we have figures for Net income and No of shares outstanding. We get the figure for EPS.

P/E Ratio is just price divided by EPS, For which we already have both the values. Correct values are attached in the 1st screenshot attached.