A firm has annual sales of $320,000,a price-earnings ratio of 24,and a profit margin of 4.2 percent.There are 14,000 shares of stock outstanding.What is the price-sales ratio?

Name: A firm has annual sales of $320,000,a price-earnings ratio of 24,and a profit margin of 4.2 percent.There are 14,000 shares of stock outstanding.What is the price-sales ratio?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Earnings per share = ($320,000 × .042)/14,000 = $0.96Price-sales ratio = (24 × $0.96)/($320,000/14,000) = 1.01

A Firm Has Annual Sales of $320,000,a Price-Earnings Ratio of 24,and