Question - Markus Company's common stock sold for $5.00 per share at the end of this year. The company paid a common stock dividend of $0.80 per share this year. It also provided the following data excerpts from this year's financial statements:
|
Ending
Balance
|
Beginning
Balance
|
|
Cash
|
$45,000
|
$42,000
|
|
Accounts receivable
|
$90,000
|
$65,000
|
|
Inventory
|
$72,100
|
$90,000
|
|
Current assets
|
$207,100
|
$197,000
|
|
Total assets
|
$766,000
|
$836,400
|
|
Current liabilities
|
$88,000
|
$82,500
|
|
Total liabilities
|
$196,000
|
$176,400
|
|
Common stock, $1 par value
|
$159,000
|
$159,000
|
|
Total stockholders' equity
|
$570,000
|
$660,000
|
|
Total liabilities and stockholders' equity
|
$766,000
|
$836,400
|
|
This Year
|
|
Sales (all on account)
|
$1,045,000
|
|
Cost of goods sold
|
$606100
|
|
Gross margin
|
$438,900
|
|
Net operating income
|
$300,000
|
|
Interest expense
|
$15,000
|
|
Net income
|
$199,500
|
Required - What is the price-earnings ratio?