1. A firm has sales of $1,080, net income of $212, net fixed assets of $516, and
ID: 2740983 • Letter: 1
Question
1. A firm has sales of $1,080, net income of $212, net fixed assets of $516, and current assets of $272. The firm has $87 in inventory. What is the common-size statement value of inventory?
2. Jupiter Explorers has $8,000 in sales. The profit margin is 4 percent. There are 4,200 shares of stock outstanding. The market price per share is $1.50. What is the price-earnings ratio?
3. A firm has a return on equity of 23 percent. The total asset turnover is 2.2 and the profit margin is 6 percent. The total equity is $5,600. What is the amount of the net income?
4. A firm has sales of $311,000 and net income of $31,600. Currently, there are 28,000 shares outstanding at a market price of $36 per share. What is the price-sales ratio?
2. Jupiter Explorers has $8,000 in sales. The profit margin is 4 percent. There are 4,200 shares of stock outstanding. The market price per share is $1.50. What is the price-earnings ratio?
3. A firm has a return on equity of 23 percent. The total asset turnover is 2.2 and the profit margin is 6 percent. The total equity is $5,600. What is the amount of the net income?
4. A firm has sales of $311,000 and net income of $31,600. Currently, there are 28,000 shares outstanding at a market price of $36 per share. What is the price-sales ratio?
Explanation / Answer
1) coomon size value of inventory = value of inventory /total asset
= 87 / (516+ 272)
= 87 / 788
= .1104 or 11.04%
2)Net profit = 8000 *.04 = 320
Earning per share = Net profit /number of shares
= 320 /4200
= $ .07619 per share
PE ratio = MPS /EPS
= 1.5/.07619
= 19.69
3)Return on equity =net income /equity
.23 = net income / 5600
net income = 5600* .23 = $ 1288
4)sales per share = 311000 / 28000 = 11.10714
price to sales ratio = price per share /net annual sales per share
= 36 / 11.10714
= 3.24
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