Question: Listed here are data for five companies. These data are from companies annual reports for the fiscal year indicated. The market price per share is
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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 markets optimism about one or two companies.
d. Compute the book value per share for each company.
e. Compare each companys book value per share to its market price per share. Based on the data, rank the companies from most valuable to least valuable. (The higher the ratio of market value to book value, the greater the value the stock market appears to be assigning to a companysstock.)
Market Price per Share Net Shares Stockholders Equity Company Fiscal Year Earnings Outstandin Brinks Bristol-Myers Squibb 12/31/2010 4,513,000 1,713,000 eBay Ford Garmin Starbucks 48,200 1305,593 196,979 S 583,100 15,638,000 15,302,179 S33.01 27.88 31.61 14.71 33.90 36.38 12/31/2010 S 57,100 12/31/2010 1,800,961 12/31/2010 6,561,000 3,449,000 12/25/2010 10/03/2010 (642,000) 584,603 945,600 3,049,562 3,682,300 744,400
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a Company Net Earnings Shares Outstanding EPS Brinks 57100 48200 118 BristolMyers Squibb 4513000 171... View full answer
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