The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.What is the price-earnings ratio for Rural?

The following information pertains to Rural Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.What is the price-earnings ratio for Rural?

The following
information pertains to Rural Company. Assume that all balance sheet amounts
represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash
and short-term investments $ 40,000

Accounts
receivable (net) 30,000

Inventory 25,000

Property,
plant and equipment 215,000

Total Assets $310,000

Liabilities and Stockholders’ Equity

Current
liabilities $ 60,000

Long-term
liabilities 75,000

Stockholders’
equity—common 175,000

Total Liabilities and
Stockholders’ Equity $310,000

Income Statement

Sales $ 95,000

Cost of
goods sold 45,000

Gross
profit 50,000

Operating
expenses 15,000

Net income $ 35,000

Number of shares of common stock 5,000

Market
price of common stock $21

Dividends
per share 1.00

MC 129. (Cont.)

What is the price-earnings ratio for
Rural?


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