A Company Reported Net Income of $850,000 for the Current

question 98

Essay

A company reported net income of $850,000 for the current year. The year-end market price per ordinary share was $12 and there were 425,000 weighted-average ordinary shares outstanding. Calculate the company's price-earnings ratio.

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Definitions:

Merchandise

Goods that are purchased, stored, and then sold by retailers or wholesalers, typically in the context of inventory for sale.

Cash Disbursements

Payments made by a business in cash, including expenses, debt payments, and distributions to shareholders.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold in a company, including the cost of the materials and labor directly used to create the product.

Receivables

Debts that customers have towards a firm for items or services that have been received or employed, yet remain unpaid.