Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 14, Problem 6E
To determine
Earnings per share:
The earning per share is the profit available for each common stock. It is profitability measure to evaluate the capability of a company to make profit on each stock invested.
Price-earnings ratio:
The price/earnings ratio reports how much dollars an investor has to invest to earn a dollar from the earnings of the company. It is calculated by dividing the market price of the share to earnings per share of the company.
Dividend payout ratio:
The ratio which indicates amount of dividend paid by a company compare to the total net income available for the common stockholders of the company.
Dividend yield ratio:
The dividend yield ratio is the dividend per share paid by the company expressed in percentage over its market price per share. It indicates how much a company is paying as dividend to the common stockholders of the company on each individual stock.
Book value per share:
The value of each individual share ascertained if total assets of the company were sold at carrying value after the creditors are paid off. It is computed by dividing the total stockholders’ equity with number of common stock outstanding.
Compute the following financial data for this year
1. Earnings per share
2. Price-earnings ratio
3. Dividend payout ratio
4. Dividend yield ratio.
5. Book value per share
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Requirement
1. Compute the following ratios for both companies for the current year, and decide which company’s stock better fits your investment strategy.
a. Acid-test ratio
b. Inventory turnover
c. Days’ sales in receivables
d. Debt ratio
e. Earnings per share of common stock
f. Price/earnings ratio
g. Dividend payout
Hello! look at the attached images and answer:
(a) Calculate ratios for the year ended 31 December 2021 (showing your workings) for Primrose Plc, equivalent to those provided above.
i. Return on year-end capital employed
ii. Net asset turnover
iii. Gross profit margin
iv. Net profit margin
v. Current ratio
vi. Closing inventory holding period
vii. Trade receivables’ collection period
viii. Trade payables’ payment period
ix. Dividend yield
x. Dividend cover
(b) Analyse the financial performance and position of Primrose Plc for the year ended 31 December 2021 compared to 31 December 2020.
(c) Explain the uses and the general limitations of ratio analysis.
Thanks a lot!
Hello! look at the attached images and answee the following points:
(a) Calculate ratios for the year ended 31 December 2021 (showing your workings) for Primrose Plc, equivalent to those provided above.
Return on year-end capital employed
Net asset turnover
Gross profit margin
Net profit margin
Current ratio
Closing inventory holding period
Trade receivables’ collection period viii. Trade payables’ payment period
Dividend yield
Dividend cover
(b) Analyse the financial performance and position of Primrose Plc for the year ended 31 December 2021 compared to 31 December 2020.
(c) Explain the uses and the general limitations of ratio analysis.
Thank you a lot!
Chapter 14 Solutions
Introduction To Managerial Accounting
Ch. 14 - Prob. 1QCh. 14 - What is the basic purpose for examining trends in...Ch. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - What is meant by the dividend yield on a common...Ch. 14 - What is meant by the term financial leverage?Ch. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Markus Company’s common stock sold for $2.75 per...
Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Markus Company’s common stock sold for $2.75 per...Ch. 14 - Prob. 11F15Ch. 14 - Prob. 12F15Ch. 14 - Prob. 13F15Ch. 14 - Prob. 14F15Ch. 14 - Prob. 15F15Ch. 14 - Common-Size Income Statement A comparative income...Ch. 14 - Prob. 2ECh. 14 - Prob. 3ECh. 14 - Financial Ratios for Debt Management Refer to the...Ch. 14 - Prob. 5ECh. 14 - Prob. 6ECh. 14 - Prob. 7ECh. 14 - Prob. 8ECh. 14 - Financial Ratios for Assessing Profitability and...Ch. 14 - Prob. 10ECh. 14 - Prob. 11ECh. 14 - Selected Financial Measures for Assessing...Ch. 14 - Effects of Transactions on Various Financial...Ch. 14 - Effects of Transactions on Various Ratios Denna...Ch. 14 - Prob. 15PCh. 14 - Common-Size Financial StatementsRefer to the...Ch. 14 - Interpretation of Financial Ratios Pecunious...Ch. 14 - Common-Size Statements and Financial Ratios for a...Ch. 14 - Financial Ratios for Assessing Profitability and...
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