Listed here are data for five companies. These data are for the companies' 2019 fiscal years. The market price per share is the closi price of the companies' stock the day after they announced their 2019 earnings. Except for market price per share, all amounts are millions. The shares outstanding number is the weighted-average number of shares the company used to compute basic earnings p share. Note that the numbers for Mountainview Investments are significantly different that the other companies. For example, the number for its shares outstanding includes a decimal, not a comma. Its shares outstanding are about are 1.6 million, not 1.6 billion. Company Nile.com Mountainview Investments Big Oil Soda Fizz Incorporated Ringer Corporation Net Earnings $12,030 82,017 14,829 7,926 5,781 Stockholders' Equity $62,682 428,972 199,400 15,458 63,392 Shares Outstanding 1,012 1.645 4,631 1,945 4,720 Market Price per Share $ 2,005.30 333,590 61.83 148.09 59.61 Required a. Compute the earnings per share (EPS) for each company. b. Compute the P/E ratio for each company. c. Using the P/E ratios, rank the companies' stock in the order that the stock market appears to value the companies, from most valuable to least valuable. d. Compute the book value per share for each company. e-1. Compute the ratio of Market Value to Book Value of each company. e-2. Based on the data, rank the companies from most valuable to least valuable. (The higher the ratio of market value to book value, the greater the value the stock market appears to be assigning to a company's stock.)
Listed here are data for five companies. These data are for the companies' 2019 fiscal years. The market price per share is the closi price of the companies' stock the day after they announced their 2019 earnings. Except for market price per share, all amounts are millions. The shares outstanding number is the weighted-average number of shares the company used to compute basic earnings p share. Note that the numbers for Mountainview Investments are significantly different that the other companies. For example, the number for its shares outstanding includes a decimal, not a comma. Its shares outstanding are about are 1.6 million, not 1.6 billion. Company Nile.com Mountainview Investments Big Oil Soda Fizz Incorporated Ringer Corporation Net Earnings $12,030 82,017 14,829 7,926 5,781 Stockholders' Equity $62,682 428,972 199,400 15,458 63,392 Shares Outstanding 1,012 1.645 4,631 1,945 4,720 Market Price per Share $ 2,005.30 333,590 61.83 148.09 59.61 Required a. Compute the earnings per share (EPS) for each company. b. Compute the P/E ratio for each company. c. Using the P/E ratios, rank the companies' stock in the order that the stock market appears to value the companies, from most valuable to least valuable. d. Compute the book value per share for each company. e-1. Compute the ratio of Market Value to Book Value of each company. e-2. Based on the data, rank the companies from most valuable to least valuable. (The higher the ratio of market value to book value, the greater the value the stock market appears to be assigning to a company's stock.)
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 66P
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Transcribed Image Text:s
Listed here are data for five companies. These data are for the companies' 2019 fiscal years. The market price per share is the closing
price of the companies' stock the day after they announced their 2019 earnings. Except for market price per share, all amounts are in
millions. The shares outstanding number is the weighted-average number of shares the company used to compute basic earnings per
share. Note that the numbers for Mountainview Investments are significantly different that the other companies. For example, the
number for its shares outstanding includes a decimal, not a comma. Its shares outstanding are about are 1.6 million, not 1.6 billion.
Company
Nile.com
Mountainview Investments
Big Oil
Soda Fizz Incorporated.
Ringer Corporation
Company
Nile.com
Mountainview Investments
Big Oil
Soda Fizz Incorporated
Ringer Corporation
$
Net Earnings
$12,030
82,017
14,829
7,926
5,781
EPS
Required
a. Compute the earnings per share (EPS) for each company.
b. Compute the P/E ratio for each company.
c. Using the P/E ratios, rank the companies' stock in the order that the stock market appears to value the companies, from most
valuable to least valuable.
d. Compute the book value per share for each company.
e-1. Compute the ratio of Market Value to Book Value of each company.
e-2. Based on the data, rank the companies from most valuable to least valuable. (The higher the ratio of market value to book value,
the greater the value the stock market appears to be assigning to a company's stock.)
(For all the requirements, round your intermediate calculations and final answers to 2 decimal places.)
11.89
49.81
3.21
4.08
1.22
P/E Ratio
Stockholders'
Equity
$62,682
168.65
6.69
19.27
36.27
48.86
428,972
199,400
15,458
63,392
C.
Ranking
1
5
4
3
2
Shares
Outstanding.
1,012
1.645
4,631
1,945
4,720
$
d. Book Value per
Share
Market Price per
Share
$ 2,005.30
333,590
61.83
148.09
59.61
61.92
260,773.23
43.11
7.95
13.42
1. Ratio of
Market Value to
Book Value:
32.39
1.28
1.43
18.62
4.43
Ranking
1
5
4
2
3
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