Smolira Golf has 10,000 shares of common stock outstanding, and the market price for a share of
Question:
Smolira Golf has 10,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2019 was $73. What is the price-earnings ratio? What is the price-sales ratio? What are the dividends per share? What is the market-to-book ratio at the end of 2019?
Some recent financial statements for Smolira Golf, Inc., follow.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
SMOLIRA GOLF, INC. Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners' Equity Current assets Current liabilities $ 3,754 $ 5,298 $ 3,986 Cash 5,827 Accounts payable Accounts receivable 7,707 8,477 Notes payable 3,045 3,318 Inventory 12,150 21,956 Other 152 179 $ 25,155 $ 36,260 $ 6,951 $ 24,700 $ 7,483 Total Total $ 16,000 Long-term debt Owners' equity $ 37,000 $ 40,000 Common stock and paid-in surplus Fixed assets Accumulated retained earnings 28,805 55,189 Net plant and equipment $ 75,301 $ 79,412 $ 68,805 $ 92,189 Total $100,456 $115,672 Total liabilities and owners' equity $100,456 $115,672 Total assets SMOLIRA GOLF, INC. 2019 Income Statement $229,854 184,317 Sales Cost of goods sold Depreciation 8,730 $ 36,807 EBIT Interest paid 1,811 $ 34,996 Taxable income Taxes 7,349 $ 27,647 Net income $16,000 Dividends Addition to retained earnings 11,647
Step by Step Answer:
To find the priceearnings ratio we first need the earnings per share The earnings per share are EPS ...View the full answer
Essentials of Corporate Finance
ISBN: 978-1260013955
10th edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
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