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A Company Reported Net Income of $478,000 and Paid $5,500

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Essay

A company reported net income of $478,000 and paid $5,500 in preferred cash dividends during the current year.The company had 100,000 common shares issued and 10,000 common shares in treasury.The year-end market price per common share was $43.05.Calculate the company's price-earnings ratio.


Definitions:

Specific Identification Method

An inventory valuation method that tracks the cost of each individual item in inventory.

Consignor

The person or entity that owns goods on consignment and sends them to the consignee for sale or display.

Days' Sales in Inventory

A financial metric that measures the average number of days it takes for a company to sell its entire inventory during a given period.

Consignee

The individual or entity to whom goods are shipped to be sold on behalf of the owner, retaining no legal ownership until sales occur.

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