Two-By-Four Wood Products (TBF)report Net Income of $2 Per Share

question 27

Essay

Two-by-Four Wood Products (TBF)report net income of $2 per share in its most recent financial statements.If TBF has no preferred shares outstanding and the market price of its stock is $4 what is TBF's P/E ratio?

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Definitions:

Percent of Sales Method

A financial forecasting approach in which accounts are projected to increase as a percentage of the projected sales level.

Unadjusted Trial Balance

A list of all the accounts and their balances in a company's ledger before any adjusting entries are made for accounting purposes.

Credit Sales

Sales processes in which products or services are provided to a customer, with the expectation that payment will be made in the future.

Promissory Note

An economic device featuring a commitment in writing from one party to another, agreeing to transfer a specific sum of money, which can be requested anytime or on an agreed-upon date later.