Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Nataro, Incorporated, has sales of $667,000, costs of $329,000, depreciation expense of
$73,000, interest expense of $46,500, a tax rate of 25 percent, and paid out $47,000 in
cash dividends. The firm has 27,200 shares of common stock outstanding.
a. What is the earnings per share, or EPS, figure? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What is the dividends per share figure? (Do not round intermediate calculations and
round your answer to 2 decimal places, e.g., 32.16.)
a. Earnings per share
b. Dividends per share
*
000
000
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