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A company generated revenues of $292 million during the last twelve months, with an operating margin...

A company generated revenues of $292 million during the last twelve months, with an operating margin of 42.4% and net margin of 27.9%. Its current market capitalization (equity value) is $703 million and it has 13 million shares outstanding. What's its trailing PE ratio? Round to one decimal place.

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Answer #1

Revenue over the past twelve months = $292 million

Net margin = 27.9%

Net income = Revenue*net margin

= $292 *0.279

= $81.468 million

Earnings per share(EPS) = Net income/Number of shares outstanding

EPS over the last twelve months = $81.468 million/13 million

= $81.468/13

Market price per share = Equity value/Number of shares outstanding

= $703 million/13 million

= $703/13

Trailing PE ratio = Current market price per share / EPS over the last twelve months

= ($703/13) / ($81.468/13)

= $703/$81.468

= 8.6

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