The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.AssetsCash and short-term investments $ 40,000Accounts receivable (net) 30,000Inventory 25,000Property, plant and equipment 215,000 Total Assets $310,000Liabilities and Stockholders' EquityCurrent liabilities $ 60,000Long-term liabilities 95,000Stockholders' equity-common 155,000 Total Liabilities and stockholders' equity $310,000 Income Statement Sales $ 90,000Cost of goods sold 45,000Gross margin 45,000Operating expenses 20,000Net income $ 25,000 Number of shares of common stock 6,000Market price of common stock $40Dividends per share 1.00Cash provided by operations $40,000 What is the price earnings ratio for this company? 6.0 times 4.2 times 8.0 times 9.6 times
The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.
Assets
Cash and short-term investments $ 40,000
Accounts receivable (net) 30,000
Inventory 25,000
Property, plant and equipment 215,000
Total Assets $310,000
Liabilities and
Current liabilities $ 60,000
Long-term liabilities 95,000
Stockholders' equity-common 155,000
Total Liabilities and stockholders' equity $310,000
Income Statement
Sales $ 90,000
Cost of goods sold 45,000
Gross margin 45,000
Operating expenses 20,000
Net income $ 25,000
Number of shares of common stock 6,000
Market price of common stock $40
Dividends per share 1.00
Cash provided by operations $40,000
What is the price earnings ratio for this company?
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6.0 times |
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4.2 times |
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8.0 times |
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9.6 times |
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