Dalmatian Corporation's Annual Report Is as Follows If the Current Market Price Is $23 on March 31,2016,compute

question 165

Multiple Choice

Dalmatian Corporation's annual report is as follows. $$\begin{array} { | l | r | r | } \hline & \text { March 31, 2016 } & \text { March 31, 2017 } \\\hline \text { Net Income } & \$ 360,000 & \$ 428,500 \\\hline \text { Preferred Dividends } & 0 & 0 \\\hline \text { Total Stockholders' Equity } & \$ 4,250,000 & \$ 5,102,000 \\\hline \text { Stockholders' Equity attributable to Preferred } & & \\\text { Stock } & 0 & 0 \\\hline \text { Number of Common Shares Outstanding } & 290,464 & 196,168 \\\hline\end{array}$$ If the current market price is $23 on March 31,2016,compute the price/earnings ratio on March 31,2017.(Round any intermediate calculations and your final answer to the nearest cent. )

• A)13.07
• B)2.18
• C)1.76
• D)10.55

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Definitions:

Profitability

The degree to which a company or business activity makes a profit, typically measured over a specific period of time.

Leverage

The use of borrowed funds to increase the potential return of an investment.

Solvency

A measure of a company's ability to meet its long-term financial obligations, reflecting its financial stability and health.

Profitability Analysis

Evaluation of a company's ability to generate profits from its operations, typically assessed through various financial metrics and ratios.