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The Following Information Pertains to Cheng Company What Is the Price-Earnings Ratio for Cheng?
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question 98

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The following information pertains to Cheng Company. Assume that all statement of financial position amounts represent both average and ending balance figures. Assume that all sales were on credit. All amounts are in thousands except per share items.  Assets  Property, plant and equipment ¥215,000 Inventory 25,000 Accounts receivable (net)  30,000 Cash and short-term investments 40,000 Total Assets ¥310,000 Equity and Liabilities  Shareholders’ equity-ordinary ¥155,000 Non-current liabilities 95,000 Current liabilities 60,000 Total Equity and Liabilities ¥310,000\begin{array}{lr}\text { Assets }\\\text { Property, plant and equipment } &¥ 215,000 \\\text { Inventory } & 25,000 \\\text { Accounts receivable (net) } & 30,000 \\\text { Cash and short-term investments } & 40,000 \\\quad \text { Total Assets } & ¥ 310,000\\\\\text { Equity and Liabilities }\\\text { Shareholders' equity-ordinary } &¥ 155,000 \\\text { Non-current liabilities } & 95,000 \\\text { Current liabilities } & 60,000 \\\quad \text { Total Equity and Liabilities } &¥ 310,000\\\\\end{array}  Assets  Income Statement  Sales revenue ¥90,000 Cost of goods sold 45,000 Gross margin 45,000 Operating expenses 20,000 Net income ¥25,000 Number of ordinary shares 6,000 Market price of ordinary shares $20 Dividends per share 1.00\begin{array}{lr}\text { Assets }\\\text { Income Statement }\\\text { Sales revenue } & ¥ 90,000 \\\text { Cost of goods sold } & 45,000 \\\text { Gross margin } & 45,000 \\\text { Operating expenses } & 20,000 \\\quad \text { Net income } &¥25,000\\\\\text { Number of ordinary shares } & 6,000 \\\text { Market price of ordinary shares } & \$ 20 \\\text { Dividends per share } & 1.00\end{array} What is the price-earnings ratio for Cheng?


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