Listed here are data for five companies. These data are for the companies 2013 fiscal years. The
Question:
Listed here are data for five companies. These data are for the companies€™ 2013 fiscal years. The market price per share is the closing price of the companies€™ stock as of March 7, 2014. Except for market price per share, all amounts are in thousands. The shares outstanding number is the weighted-average number of shares the company used to compute basic earnings per share.
Required
a. Compute the earnings per share (EPS) for each company.
b. Compute the P/E ratio for each company.
c. Using the P/E ratios, rank the companies€™ stock in the order that the stock market appears to value the companies, from most valuable to least valuable. Identify reasons the ranking based on P/E ratios may not represent the market€™s optimism about one or two companies.
d. Compute the book value per share for each company.
e. Compare each company€™s book value per share to its market price per share. Based on the data, rank the companies from most valuable to least valuable.
Step by Step Answer:
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds