Use the Following Information to Obtain the Ratios Requested Below

question 94

Short Answer

Use the following information to obtain the ratios requested below.Where necessary,carry answers to one decimal place.
Dividends per share: $.54
Market price per share: $30
Net income: $88,000
Average stockholders' equity: $625,000
Earnings per share: $1.25

A) Dividends yield = _____________%
B) Return on equity = _____________%
C) Price/earnings (P/E) ratio = __________times

• A) Dividends yield = _____________%
• B) Return on equity = _____________%
• C) Price/earnings (P/E) ratio = __________times

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Definitions:

Gross Margin Ratio

A financial metric that measures a company's financial health by dividing its gross profit by net sales, indicating the percentage of sales revenue remaining after deducting the cost of goods sold.

Profitability

The ability of a business to generate earnings compared to its expenses and other costs incurred during a specific period.

Operating Cycle

The duration of time it takes for a company to buy inventory, sell it as finished goods, and collect cash from the sales.