All categories

3 years ago

The p/e ratio can be interpreted as ""the number of years’ earnings to pay back purchase price"" True or False

Business

1 answer:

ICE Princess25 [194]3 years ago

7 0

Answer:

True

Explanation:

P/E ratio is the price to earning ratio. Investor look into this ratio before investing or buying share of the company as it shows the market value of the shares or demand of the shares in the market. If ratio is higher then investor anticipate the growth of the company´s earning in the future, it also show investors are willing to pay higher price for each dollar earning of the company.

Price earning ratio= $\frac{market\ value\ price\ per\ share}{earning\ per\ share}$

You might be interested in

has acquired several other companies. Assume that Patton purchased Kate for $ 6 comma 000 comma 000 cash. The book value of Kate

svlad2 [7]

Answer and Explanation:

1. The amount of goodwill is shown below:

= Purchase price - the market value of net assets

= $6,000,000 - ($17,000,000 + $13,000,000)

= $2,000,000

2. Now the journal entry for purchase is

Assets $17,000,000

Goodwill $2,000,000

To Liabilities $13,000,000

To Cash $6,000,000

(Being the purchase is recorded)

For recording this we debited the assets and goodwill as it increased the assets and credited the liabilities and cash as it also increased the liabilities and decreased the assets

5 0

3 years ago

Donald and Charlene are married and do not have any children. They plan to ensure that the other will not be unduly burdened by

Bas_tet [7]

They are using the Dual income and no kids method

8 0

3 years ago

Land, a building and equipment are acquired for a lump sum of $1,000,000. The market values of the land, building and equipment

sergij07 [2.7K]

Answer:

The answer is option (b). $250,000

Explanation:

Step 1: Determine total market value

The expression for the total market value is;

Total market value=land value+building value+equipment value

where;

land value=$300,00

building value=$600,000

equipment value=$300,000

replacing;

Total market value=(300,000+600,000+300,000)=$1,200,000

Total market value=$1,200,000

Step 2: Determine fraction of the total market value that is equipment

Equipment fraction=equipment value/total market value

where;

equipment value=$300,000

total market value=$1,200,000

replacing;

Equipment fraction=300,000/1,200,000=0.25

Step 3: Determine cost assigned to the equipment

Cost assigned to the equipment=equipment fraction×lump sum

where;

equipment fraction=0.25

lump sum=$1,000,000

replacing;

Cost assigned to the equipment=(0.25×1,000,000)=250,000

Cost assigned to the equipment=$250,000

3 0

3 years ago

On January 1, 2020, Harter Company had Accounts Receivable $139,000,

LuckyWell [14K]

<u>Solution and Explanation:</u>

<u>Date Particulars Post ref. Debit ($) Credit ($) </u>

5- Jan Accounts Receivable 20000

Sales revenue 20000

(To record the sales revenue)

5- Jan Notes Receivable 30000

Accounts receivable 30000

(To record the sales revenue)

18- Feb Notes receivable 8000

Sales revenue 8000

(To record the notes receivable and sales revenue)

20- April Cash 20400

Notes receivable 20000

Interest revenue 400

(To record the collection of notes)

30 april Cash 25000

Notes receivable 25000

(to record the collection of payment due)

25 May Notes receivable 6000

Accounts receivable 6000

( To record the note settlement of past due balance)

18- Aug Cash account 8360

Notes receivable 8000

Interest revenue 360

(To record the collection of notes payment)

25- Aug Accounts receivable 6135

Notes receivable 6000

Interest revenue 135

1-Sep Notes receivable 12000

Sales revenue 12000

(To record the note for amount due)

6 0

2 years ago

The actual variable cost of goods sold for a product was $140 per unit, while the planned variable cost of goods sold was $136 p

kozerog [31]

Answer:

$326,400 is the variable cost quantity factor while $56,000 is the unit cost factor

Explanation:

The variable cost quantity factor is a measure of the difference between the planned and actual units multiplied by planned variable cost.

That is Variable Cost quantity factor = (planned units - actual units sold) x planned variable cost

= (14000-2400) - 14000) x $136

= (11600 - 14000) x $136

= -$326,400

Unit Cost factor = $(140 - 136) x 14000 units

=$56,000

3 0

2 years ago

Read 2 more answers