The price-sales ratio if the market price is $43.20 per share is: 4.28.
Using this formula
Price-sales ratio=Market price per share/[Net sales/ (Ending Common stock ($1 par value)]
Let plug in the formula
Price-sales ratio = $43.20 / [$827,500 / ($82,000 / $1)] = 4.28
Price-sales ratio = $43.20/ [$827,500 /$82,000]
Price-sales ratio = $43.20/10.091
Price-sales ratio = 4.28
Therefore the price-sales ratio if the market price is $43.20 per share is: 4.28.
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The complete question is:
Income Statement For the Year
Net sales $827,500
COGS 611,800
Depreciation 23,100
EBIT $192,600
Interest 9,700
Taxable income $182,900
Taxes 6,200
Net income $176,700
Balance Sheet
Beginning of Year End of Year
Cash $ 38,200 $43,700
Accounts receivable 91,400 86,150
Inventory 203,900 214,600
Net fixed assets 516,100 537,950
Total assets $849,600 $882,400
Accounts payable $136,100 $104,300
Long-term debt 329,500 298,200
Common stock ($1 par value) 75,000 82,000
Retained earnings 309,000 397,900
Total Liab. & Equity $849,600 $882,400
What is the price-sales ratio if the market price is $43.20 per share? (Use end-of-year values)
