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Some recent financial statements for Earl Grey Golf Corp. follow. Some recent financial statements for Earl...

Some recent financial statements for Earl Grey Golf Corp. follow.

Some recent financial statements for Earl Grey Golf Corp. follow.

EARL GREY GOLF CORP.
2017 and 2018 Statement of Financial Position
Assets Liabilities and Owners’ Equity
2017 2018 2017 2018
Current assets Current liabilities
Cash $ 24,216 25,800 Accounts payable $ 21,020 $ 28,800
Accounts receivable 13,016 16,900 Notes payable 18,000 10,700
Inventory 25,414 28,800 Other 11,343 16,700
Total $ 62,646 71,500 Total $ 50,363 $ 56,200
Long-term debt $ 86,000 $ 98,800
Owners’ equity
Common stock and paid-in surplus $ 50,000 $ 50,000
Retained earnings 127,351 229,000
Fixed assets
Net plant and equipment $ 251,068 362,500 Total $ 177,351 $ 279,000
Total assets $ 313,714 434,000 Total liabilities and owners’ equity $ 313,714 $ 434,000
EARL GREY GOLF CORP.
2018 Statement of Comprehensive Income
Sales $ 502,045
Cost of goods sold 241,600
Depreciation 32,400
Earnings before interest and tax $ 228,045
Interest paid 13,630
Taxable income $ 214,415
Taxes (40%) 85,766
Net income $ 128,649
Dividends $ 27,000
Additions to retained earnings 101,649

Earl Grey Golf Corp. has 20,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2018 was $57.

What is the price–earnings ratio? (Round the intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.)

Price–earnings ratio             times

What are the dividends per share? (Round the final answer to 2 decimal places. Omit $ sign in your response.)

Dividends           $  per share

What is the market-to-book ratio at the end of 2018? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Market-to-book ratio             times

If the company’s growth rate is 10 %, what is the PEG ratio? (Round the intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.)

PEG ratio             times
EARL GREY GOLF CORP.
2018 Statement of Comprehensive Income
Sales $ 502,045
Cost of goods sold 241,600
Depreciation 32,400
Earnings before interest and tax $ 228,045
Interest paid 13,630
Taxable income $ 214,415
Taxes (40%) 85,766
Net income $ 128,649
Dividends $ 27,000
Additions to retained earnings 101,649

Earl Grey Golf Corp. has 20,000 shares of common stock outstanding, and the market price for a share of stock at the end of 2018 was $57.

What is the price–earnings ratio? (Round the intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.)

Price–earnings ratio             times

What are the dividends per share? (Round the final answer to 2 decimal places. Omit $ sign in your response.)

Dividends           $  per share

What is the market-to-book ratio at the end of 2018? (Do not round intermediate calculations. Round the final answer to 2 decimal places.)

Market-to-book ratio             times

If the company’s growth rate is 10 %, what is the PEG ratio? (Round the intermediate calculations to 2 decimal places. Round the final answer to 2 decimal places.)

PEG ratio             times

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Homework Answers

Answer #1
PE ratio Price per share/Earnings per share
Earnings per share Net income/No of common shares outstanding
Earnings per share 128649/20000
Earnings per share $6.43
PE ratio 57/6.43
PE ratio 8.86 times
Dividend per share Total dividend/No of common shares outstanding
Dividend per share 27000/20000
Dividend per share $1.35
Market to book ratio Price per share/Book value per share
Book value per share Total equity/No of common shares oustanding
Book value per share (50000+229000)/20000
Book value per share $13.95
Market to book ratio 57/13.95
Market to book ratio $4.09
PEG ratio PE ratio/Growth rate
PEG ratio 8.86/10
PEG ratio 0.89 times
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