Question

# The financial statements of Friendly Fashions include the following selected data (in millions):      (\$ in...

The financial statements of Friendly Fashions include the following selected data (in millions):

 (\$ in millions) 2018 2017 Sales \$ 8,343 \$ 9,434 Net income \$ 170 \$ 648 Stockholders' equity \$ 1,780 \$ 2,220 Average Shares outstanding (in millions) 710 - Dividends per share \$ .28 Stock price \$ 8.00 - Required: Calculate the following ratios for Friendly Fashions in 2018. (Enter your Dividend yield and Price-earning ratio values to two decimal places. Enter your answer in millions (i.e. 5,500,000 should be entered as 5.5).)

 Net Income ÷ Average stockholders' equity = Return on equity \$170 ÷ \$2000 = 8.5% Dividend per share ÷ Dividend yield Stock price = Dividend yield \$.28 ÷ \$8.00 = 3.5% Net income ÷ Earnings per share Average shares outstanding = Earnings per share \$170 ÷ \$710 = 0.23 Stock price ÷ Price ­earnings ratio Earnings per share = Price ­earnings ratio \$8.00 ÷ 0.23 = 35

Explanation:

Average stockholders' equity (\$2220 + \$1780)/2 = \$2000