Wilson, Inc., has a current stock price of $44.50. For the past year, the company had net income of $6,400,000, total equity of $21,610,000, sales of $39,300,000, and 4.4 million shares of stock outstanding.

A) What are earnings per share (EPS) ?

B) What is the price earnings ratio?

C) What is the price sales ratio?

D) What is the book value per share?

E) What is the market-to-book ratio?

The computations are shown below:

A. Earning per share

= Net income : number of shares outstanding

= $6,400,000 : 4,400,000 shares

= $1.45

B. Price earnings ratio

= Current stock price : Earning per share

= $44.50 : $1.45

= 30.69

C. Prices sales ratio

Price sales ratio = (Market price per share) : (Total sales per share)

where,

Total sales per share = (Total sales) : (Number of shares)

= $39,300,000 : 4,400,000 shares

= 8.93

So, the price sales ratio = $44.50 : $8.93

= 4.98 times

D. Book value per share

= Book value : number of shares outstanding

= $21,610,000 : 4,400,000 shares

= $4.91

E. Market-to-book ratio

Market to book ratio = (Market price per share) : (book value per share)

= $44.50 : $4.91

= 9.06