Alberta High Skies Company Has Net Income of $3 Million

question 1

Multiple Choice

Alberta High Skies Company has net income of $3 million.It issued 500,000 shares two years ago at an issue price of $20 per share,and the stock is now trading at $35 per share.What is Alberta High Skies' price-earnings ratio?

• A) 1.75
• B) 3.33
• C) 5.83
• D) 9.17

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Definitions:

Net Income

The ultimate earnings of a corporation after reducing total income by any expenses, taxes, and costs.

Prior Period Adjustments

Adjustments made to correct financial statements of previous periods due to errors or changes in accounting policy, ensuring accuracy in current financial reporting.

Statement Of Retained Earnings

A financial document that shows how a firm's earnings are reinvested in the business or paid out to shareholders.

Multiple-step

An income statement format that shows several steps to determine net income, including gross profit, operating income, and other income and expenses.