A Firm Has Net Income of $18,000 and a Book

question 100

Multiple Choice

A firm has net income of $18,000 and a book value per share of $2.10. The firm has 30,000 shares of stock outstanding and a price-earnings ratio of 15.9. What is the price-book ratio?

• A) 1.7
• B) 2.4
• C) 2.7
• D) 4.5
• E) 5.1

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Definitions:

Internal Users

Individuals within an organization who use accounting information for decision-making, including managers and employees.

Days' Sales Uncollected

A financial metric indicating the average number of days it takes a company to collect payment after a sale has been made, used as an indicator of the efficiency of a company's credit and collection policies.

Financial Information

Data regarding the financial performance, condition, and cash flow of an entity, used by stakeholders to make economic decisions.

Whirlpool Company

An American multinational manufacturer and marketer of home appliances.