Ames, Inc., has a current stock price of $42.50. For the past year, the company

Question

Ames, Inc., has a current stock price of $42.50. For the past year, the company had net income of $7,150,000, total equity of $21,760,000, sales of $40,800,000, and 5.9 million shares of stock outstanding What are earnings per share (EPS)? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Earninga per share What is the price-eanings ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Price-earnings ratio What is the price-sales ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g, 32.16.) Price-sales ratio What is the book value per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Book value per share What is the market-to-book ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Market-to-book ratio times times times

Explanation / Answer

Price= $42.50

Net Income= 7150,000

Total equity = 21760,000

Sales= 40800,000

Number of shares= 5900,000

1: EPS= Net Income/ Number of shares

= 7150,000/ 5900,000

=$1.21

2: Price earnings ratio =Price/ EPS

= 42.50/ 1.21

= 35.12

3: Price to sales ratio = Price Per Share / Annual Net Sales Per Share

= 42.50 / (40800000/5900000)

=6.15

4: Book value per share = Equity/ Number of shares

= 21760,000/5900,000

=$3.69

5: Market to book ratio = Market price/ Book value per share

= 42.50/3.69

=11.52

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