The Forward Price-Earning Ratio Is Based on

question 82

Multiple Choice

The forward price-earning ratio is based on

• A) the expected earnings over the coming 12 months and predicted share price in the next 12 months.
• B) the expected earnings in the previous 12 months and predicted share price in the next 12 months.
• C) the expected earnings over the coming 12 months and current share price.
• D) the previous earnings in the past 12 months and the predicted share price in the next 12 months.

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Definitions:

Administrative Expenses

Expenses that relate to the general operation of a company and do not directly tie to production activities, such as office supplies and salaries of administrative personnel.

Direct Labor

The labor costs of workers who are directly involved in manufacturing a product or providing a service.

Overhead Costs

Overhead costs refer to ongoing expenses related to the operation of a business that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.

Work in Process

Partially finished goods that are still in the production process at the end of an accounting period.