Suppose the Move It! Exercise Chain Has Revenues of $45

question 148

Essay

Suppose the Move It! exercise chain has revenues of $45 million, accounting costs of $15 million, and currently has issued 10 million shares of stocks selling at $90 each. Compute the price-earning ratio. Show your work. Is this ratio relatively high or low? What might an increase in the price-earnings ratio indicate?

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Definitions:

State Enterprises

Businesses owned and operated by the government aimed at providing services or goods to the public.

Incentives

Motivational tools or rewards designed to encourage specific actions or behaviors by individuals or groups.

Economic Recession

A significant decline in economic activity across the economy, lasting for several months or longer, often visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Low-Priced Retailers

Retail businesses that focus on offering goods to consumers at low prices, typically by reducing overhead costs or operating on thin profit margins.