The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
Liabilities and Stockholders' Equity
Income Statement
What is the price earnings ratio for this company?
A) 6.0 times
B) 4.2 times
C) 8.0 times
D) 9.6 times

Question

The following information pertains to Newman Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets
 Liabilities and Stockholders' Equity
 Income Statement
  What is the price earnings ratio for this company?
A) 6.0 times 
B) 4.2 times 
C) 8.0 times 
D) 9.6 times

Quizplus · Accepted Answer

We cannot determine the price earnings ratio with the given information. We need net income and the market price per share to calculate the ratio. Therefore, none of the answer choices is correct.

The Following Information Pertains to Newman Company