Suppose the Move It! Exercise Chain Has Revenues of $45

question 148

Essay

Suppose the Move It! exercise chain has revenues of $45 million, accounting costs of $15 million, and currently has issued 10 million shares of stocks selling at $90 each. Compute the price-earning ratio. Show your work. Is this ratio relatively high or low? What might an increase in the price-earnings ratio indicate?

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Definitions:

Detonator

A device used to trigger an explosion in dynamite and other high explosives, typically initiating a larger, secondary explosive charge.

Lower Explosion Limit (LEL)

The lowest concentration of a particular gas or vapor in air that can produce a flash of fire in presence of an ignition source.

Propagate

To reproduce, spread, or increase in number, often used in the context of plants (via seeds or cuttings) and ideas or information.

Upper Explosion Limit (UEL)

The highest concentration of vapor in air above which propagation of flame does not occur on contact with a source of ignition.