Questions: 1. Assuming that the preference share has preference as to dividends, compute for the book value per ordinary share. 2. Assuming that the preference share has preference as to dividends, compute for the book value per preference share.
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.
CCC Company reported the following shareholders’ equity on December 31, 2020:
| 2,000,000 | |
| Ordinary share capital, P100 par | 4,000,000 |
| (900,000) |
No dividends have been paid on the preference share since 2018.
Questions:
1. Assuming that the preference share has preference as to dividends, compute for the book value per ordinary share.
2. Assuming that the preference share has preference as to dividends, compute for the book value per preference share.
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