Module 2

Assignments to complete this module:

• Reading:

• Chapter 2: Financial Statements, Taxes, and Cash Flows

• Activity: Highly recommended, not graded

Activity #1

CLO #1 - Recall accounting and finance vocabulary, terminology, charts, tables, equations, and calculations.

CLO #2 - Analyze and evaluate a Balance Sheet, Income Statement, and Statement of Cash Flows.

CLO #5 - Compile technical and strategic investment principles.

ABC Company had additional retained earnings for the current fiscal year just ended of $395,000. The firm paid out $195,000 in cash dividend, and it has ending total equity of $5.3 million. The company currently has 170,000 shares of common stock outstanding. Please answer the following questions:

1. What are earnings per share (E/PS)?

2. Dividends per share?

3. Book value of share?

4. If the stock currently sells for $64 per share, what is the market-to-book ratio?

5. The price to earnings ratio (P/E)?

6. The company had sales of $5.15 million, what is the price to sales ratio (P/S)?

7. Finally, explain the implication of P/E ratio for different types of investors.

Provide your explanations and definitions in detail and be precise. Comment on your findings. Provide references for content when necessary. Provide your work in detail and explain in your own words.