Question

You are given the following information for Smashville, Inc.

Cost of goods sold:	$	229,000
Investment income:	$	2,500
Net sales:	$	374,000
Operating expense:	$	82,000
Interest expense:	$	7,400
Dividends:	$	9,000
Tax rate:		30	%

Current liabilities:	$	18,000
Cash:	$	21,000
Long-term debt:	$	23,000
Other assets:	$	41,000
Fixed assets:	$	166,000
Other liabilities:	$	5,000
Investments:	$	45,000
Operating assets:	$	37,000

  

During the year, Smashville, Inc., had 17,000 shares of stock outstanding and depreciation expense of $17,000. At the end of the year, Smashville stock sold for $54 per share. Calculate the price-book ratio, price-earnings ratio, and the price-cash flow ratio. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Price Book Ratio_____

Price Earning ______

Price cash flow _____

Answer 1

Net sales:	374,000
Less :Cost of goods sold:	229,000
Gross profit	145,000
Less : Operating expense:	82,000	Assumed D&A is included in operating expenses
Operating income	63,000
Less :Interest expense:	7,400
Add :Investment income:	2,500
Income before taxes	58,100
Less : Tax (30%)	17,430
Net income	40,670
Shares outstanding	17,000
Earnings per share	$                2.39	(Net income / shares outstanding)
Price Earning (P/E )	22.57	( Share price/EPS)
Current liabilities:	18,000
Long-term debt:	23,000
Other liabilities:	5,000
Total liabilities	46,000
Shareholders equity	264,000	(Total assets - total liabilities)
Total liabilities & shareholders equity	310,000
Cash:	21,000
Other assets:	41,000
Fixed assets:	166,000
Investments:	45,000
Operating assets:	37,000
Total Assets	310,000
Book value per share	$              15.53	(Shareholders equity / shares outstanding)
Price Book Ratio (P/B)	3.48	( Share price/BVPS)
Cash flow	57,670	Net income + Depreciation
Cash flow per share	$                3.39	(Cash flow / shares outstanding)
Price cash flow	15.92	( Share price/cash flow per share)
Cash per share	$                1.24	(Cash / shares outstanding)
Price cash (P/C)	43.71	( Share price/cash per share)