The Following Information Pertains to Carlton Company

question 66

Multiple Choice

The following information pertains to Carlton Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Liabilities and Stockholders' Equity
Income Statement
What is the price earnings ratio for this company? Round your answer to one decimal point.

• A) 8.0 times
• B) 2.5 times
• C) 4.0 times
• D) 6.0 times

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Definitions:

Accounts Payable

A liability to a creditor, carried on an open account, usually for purchases of goods and services.

Net Income

The income that remains in a business after all costs and expenses have been subtracted from total revenue, indicative of the financial performance.

Cash Flow Hedge

A financial instrument intended to offset potential losses or gains that could be incurred by future cash flows, acting as a buffer against currency, interest rate, or commodity price changes.

Forward Exchange Contract

A financial derivative that locks in the exchange rate at which a currency can be bought or sold on a future date.