The following information pertains to Cachet Company. Assume that all Balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments P 40,000 Accounts receivable (net) 30,000 Inventory 25,000 Property, plant and equipment 215,000 Total Assets P310, 000 Liabilities and Stockholders’ Equity Current liabilities P 60,000 Long-term liabilities 95,000 Stockholders’ equity—common 55,000 Total Liabilities and Stockholders’ Equity P310, 000 Income Statement Sales P 90,000 Cost of goods sold 45,000 Gross margin 45,000 Operating expenses 20,000 Net income P 25,000 Number of shares of common stock 6,000 Market price of common stock P20 Dividends per share P1.00 What is the price-earnings ratio for this company? A. 6 times B. 4.2 times C. 8 times D. 4.8 times Can you please give me a coherent solution for this?
The following information pertains to Cachet Company. Assume that all
Balance sheet amounts represent both average and ending balance figures.
Assume that all sales were on credit.
Assets
Cash and short-term investments P 40,000
Accounts receivable (net) 30,000
Inventory 25,000
Property, plant and equipment 215,000
Total Assets P310, 000
Liabilities and
Current liabilities P 60,000
Long-term liabilities 95,000
Stockholders’ equity—common 55,000
Total Liabilities and Stockholders’ Equity P310, 000
Income Statement
Sales P 90,000
Cost of goods sold 45,000
Gross margin 45,000
Operating expenses 20,000
Net income P 25,000
Number of shares of common stock 6,000
Market price of common stock P20
Dividends per share P1.00
What is the price-earnings ratio for this company?
A. 6 times
B. 4.2 times
C. 8 times
D. 4.8 times
Can you please give me a coherent solution for this?
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