The following data have been taken from the financial records of Bubba's Body Shop for the current year:
$$\begin{array} { l r }
\text { Current assets } & \$ 52,000 \
\text { Long-term assets } & \$ 106,000 \
\text { Current liabilities } & \$ 20,000 \
\text { Long-term liabilities } & \$ 30,000 \
\text { Total stockholders' equity } & \$ 108,000 \
\text { Earnings per share } & \$ 8 \
\text { Market price per share } & \$ 60 \
\text { Dividend per share } & \$ 4
\end{array}$$
a.Calculate the price/earnings ratio.
b.Calculate the current ratio.

Question

The following data have been taken from the financial records of Bubba's Body Shop for the current year:
 $$\begin{array} { l r } 
\text { Current assets } & \$ 52,000 \
\text { Long-term assets } & \$ 106,000 \
\text { Current liabilities } & \$ 20,000 \
\text { Long-term liabilities } & \$ 30,000 \
\text { Total stockholders' equity } & \$ 108,000 \
\text { Earnings per share } & \$ 8 \
\text { Market price per share } & \$ 60 \
\text { Dividend per share } & \$ 4
\end{array}$$ 
a.Calculate the price/earnings ratio.
b.Calculate the current ratio.

Quizplus · Accepted Answer

The Answer of The following data have been taken from the financial records of Bubba's Body Shop for the current year:
 $$\begin{array} { l r } 
\text { Current assets } & \$ 52,000 \
\text { Long-term assets } & \$ 106,000 \
\text { Current liabilities } & \$ 20,000 \
\text { Long-term liabilities } & \$ 30,000 \
\text { Total stockholders' equity } & \$ 108,000 \
\text { Earnings per share } & \$ 8 \
\text { Market price per share } & \$ 60 \
\text { Dividend per share } & \$ 4
\end{array}$$ 
a.Calculate the price/earnings ratio.
b.Calculate the current ratio.

The Following Data Have Been Taken from the Financial Records