The main purpose of price/sales multiple ratio is typically only for the purpose of valuation of firms having no earnings till the date of valuation. Therefore, the given statement holds true.
<h3>What is the significance of Price/Sales ratio?</h3>
Price/Sales ratio can be referred to or considered as a ratio that is used to determine the total sales made by the company without earning any profits over their sales at a given price.
Investors use this ratio in order to valuate a firm based on the sales they have made in multiples, however without earnings, that can prove to derive good investment returns in the future.
Therefore, the aforementioned statement regarding price/sales ratio holds true.
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Answer:
$210
Explanation:
Date Description Units Price Total Balance
1-Jun Opening 15 $12 $180 $180
5-Jun Purchase 10 $13 $130 $310
12-Jun Purchase 20 $14 $280 $590
17-Jun *Sale -30 -$380 $210
*Working
Sale
Date Units Price Total
17-Jun -15 $12 $(180)
-10 $13 $(130)
-5 $14 $(70)
Total Sale -30 -$380
So, the correct answer is $210.
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Answer:
$6,755
Explanation:
The computation of the cost of the ending inventory using the perpetual LIFO method is as follows:
For January:
Total value = Units remaining in inventory × cost per unit
= (23 - 17) × $205
= $1,230
For February:
Total value = Units remaining in inventory × cost per unit
= (33 - 17) × $210
= $3,360
For May:
Total value = Units remaining in inventory × cost per unit
= (28 - $21) × $215
= $1,505
For September:
Total value = Units remaining in inventory × cost per unit
= (25 - 20) × $220
= $1,100
For November:
Total value = Units remaining in inventory × cost per unit
= (25 - 23) × $220
= $660
Cost of the ending inventory:
= $1,230 + $3,360 + $1,505 + $660
= $6,755
