Following is some financial information of Dell Inc. $$\begin{array} { l r r }
& 2006 & { 2005 } \
\text { Revenues } & \$ 49,205 & \$ 41,444 \
\text { Net income } & 3,043 & 2,645 \
\text { Total assets } & 23,215 & 19,311 \
\text { Shareholder's equity } & 6,485 & 6,280 \
\text { Cash flow from operations } & 5,310 & 3,670 \
\text { Basic earnings per share } & 1.21 & 1.03 \
\text { Book value per share } & 2.61 & 2.46 \
\text { Closing stock price } & 33.44 & 23.86
\end{array}$$
-What is Dell's price-to-earnings ratio for 2006?
A)27.63
B)12.81
C)23.65
D)9.70

Question

Following is some financial information of Dell Inc. $$\begin{array} { l r r } 
& 2006 &  { 2005 } \
\text { Revenues } & \$ 49,205 & \$ 41,444 \
\text { Net income } & 3,043 & 2,645 \
\text { Total assets } & 23,215 & 19,311 \
\text { Shareholder's equity } & 6,485 & 6,280 \
\text { Cash flow from operations } & 5,310 & 3,670 \
\text { Basic earnings per share } & 1.21 & 1.03 \
\text { Book value per share } & 2.61 & 2.46 \
\text { Closing stock price } & 33.44 & 23.86
\end{array}$$
-What is Dell's price-to-earnings ratio for 2006?
A)27.63
B)12.81
C)23.65
D)9.70

Quizplus · Accepted Answer

The price-to-earnings (P/E) ratio is calculated by dividing the closing stock price by the basic earnings per share. For 2006, it is 33.44 / 1.21 = 27.63.

Following Is Some Financial Information of Dell Inc -What Is Dell's Price-To-Earnings Ratio for 2006? A)27

Following Is Some Financial Information of Dell Inc -What Is Dell's Price-To-Earnings Ratio for 2006?
A)27