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20 June, 02:31

Wilson, Inc., has a current stock price of $43.50. For the past year, the company had net income of $7,050,000, total equity of $21,740,000, sales of $40,600,000, and 5.7 million shares of stock outstanding. What are earnings per share (EPS) ? What is the price-earnings ratio? What is the price-sales ratio? What is the book value per share? What is the market-to-book ratio?

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  1. 20 June, 04:46
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    1. $1.24

    2. 35.17

    3. 6.107

    4. $3.814

    5. 11.405

    Explanation:

    Given that,

    Current stock price = $43.50

    Net income = $7,050,000

    Total equity = $21,740,000

    Sales = $40,600,000

    shares of stock outstanding = 5.7 million

    1. Earnings per share:

    = Net income : shares of stock outstanding

    = $7,050,000 : 5.7 million

    = $1.24

    2. Price-earnings ratio:

    = Market price per share : EPS

    = $43.50 : $1.24

    = 35.17

    3. Price-sales ratio:

    = Market capitalization : Total sales

    = ($43.50 * 5,700,000) : $40,600,000

    = $247,950,000 : $40,600,000

    = 6.107

    4. Book value per share:

    = Shareholder's equity : shares of stock outstanding

    = $21,740,000 : 5,700,000

    = $3.814

    5. Market-to-book ratio:

    = Market value per share : Book value per share

    = $43.50 : $3.814

    = 11.405
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