Determining the price-earnings ratio


1) Son’s baker has present liabilities= $5,600, net working capital= $2,100, inventory= $3,900, and sales=$13,500. Determine the quick ratio? Suppose pre-paid expenses are zero.

i) 0.68
ii) 0.70
iii) 1.38
iv) 1.47
v) 2.08

2) A company has the sales= $350,000, profit margin= 6 percent, total asset turnover rate= 1.25, and the equity multiplier= 1.4. Compute the return on equity?

i) 10.50 percent
ii) 7.50 percent
iii) 7.75 percent
iv) 11.11 percent
v) 5.36 percent

3) If debt ratio= 0.80, Determine the Equity Multiplier?

i) 0.8
ii) 0.2
iii) 15
iv) 1.8
v) 4$137,500
vi) $146,250

4) Redstone, Inc., has the market-to-book ratio= 2, net income= $84,166, a book value per share= $20.6, and 58,732 shares of stock outstanding. Determine the price-earnings ratio?

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Finance Basics: Determining the price-earnings ratio
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