The kids’ mart has a market-to-book ratio of 3.3, net income of $87,100, a book value per share of $18.50, and 7,500 shares of stock outstanding. what is the price-earnings ratio?

Book value per share = total common s.h.e / number of common shares

18.50 = total common s.h.e / 7,500

Total common s.h.e = 18.50 * 7,500

Total common S.h.e = 138,750

Market-to-book value = market value / book value

3.3 = market value / 138,750

Market value = 3.3 * 138,750

Market value = 457,875

Earnings per share = (Net Income – Dividends on Preferred Stocks) / ave. outstanding shares

EPS = 87,100 / 7,500

EPS = 11.61

Market value per share = 457,875 / 7,500

MVPS = 61.05

Price – Earnings Ratio = Market Value per share / Earnings per share

P/E ratio = 61.05 / 11.61

P/E ratio = 5.26

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total

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