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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Kroger, a grocery store, recently had a price- earnings ratio of 17.5, while the average price-earnings ratio in the grocery store industry was 21.4. What might explain this difference?

To determine

Price/earnings ratio: Price/earnings ratio are used to determine the profitability of a company. This ratio is abbreviated as P/E.

Formula:

Price /earning ratio = Market price per share of common stockEarning per share

Explanation

The price-earnings ratio is used to measure the expectation of the market towards future earnings prospects of a company...

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