3 6 Makers Corp. had additions to retained earnings for the year just ended of $
ID: 2814709 • Letter: 3
Question
3 6 Makers Corp. had additions to retained earnings for the year just ended of $415,000. The firm pald out $220,000 in cash dividends, and it has ending total equity of $56 million. The company currently has 170,000 shares of common stock outstanding a. What are earnings per share? (Do not round Intermedilate calculatlons and round your answer to 2 declmal places, e.g., 3216.) your answer to 2 declmal places, e.g. 3216.) round your answer to 2 diecimal places, e.g., 32.16.) b. What are dividends per share? (Do not round Intermediate calculations and round c. What is the book value per share? (Do not round Intermediate caiculetions and d. If the stock currently sells for $65 per share, what is the market-to-book ratio? (Do not round Intermediate calculatlons and round your answer to 2 decimel places, e.g e. What is the price-earnings ratio? (Do not round intermediate calcuiations and round t. If the company had sales of $745 million, what is the price-sales ratio? (Do not round 32.16.) your answer to 2 decimal piaces, e.g. 32.16.) intermediate calculations and round your enswer to 2 decimal piaces,e.g, 32.16.) a. Earnings b.Dividends per shareExplanation / Answer
Additions to Retained Earnings = $415,000
Dividends = $220,000
Additions to Retained Earnings = Net Income - Dividends
$415,000 = Net Income - $220,000
Net Income = $635,000
Total Equity = $5,600,000
Number of shares outstanding = 170,000
Answer a.
Earnings per share = Net Income / Number of shares outstanding
Earnings per share = $635,000 / 170,000
Earnings per share = $3.74
Answer b.
Dividends per share = Dividends / Number of shares outstanding
Dividends per share = $220,000 / 170,000
Dividends per share = $1.29
Answer c.
Book Value per share = Total Equity / Number of shares outstanding
Book Value per share = $5,600,000 / 170,000
Book Value per share = $32.94
Answer d.
Market-to-book Ratio = Market Price per share / Book Value per share
Market-to-book Ratio = $65 / $32.94
Market-to-book Ratio = 1.97 times
Answer e.
Price-Earnings Ratio = Market Price per share / Earnings per share
Price-Earnings Ratio = $65 / $3.74
Price-Earnings Ratio = 17.38 times
Answer f.
Sales per share = Sales / Number of shares outstanding
Sales per share = $7,450,000 / 5,600,000
Sales per share = $1.3304
Price-Sales Ratio = Market Price per share / Sales per share
Price-Sales Ratio = $65 / $1.3304
Price-Sales Ratio = 48.86 times
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