# 39200 10000 20000 13000 13000 8000 8400 55600 5000

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 13,000 (8,000) 8,400 55,600 \$(5,000) 5,000 0 \$(25,000) (30,600) 10,000 (45,600) 10,000 10,000 \$20,000 \$8,400 10,000 5,000 Fred's Fine Lingerie and Harley Shoppe Ratios P/E \$25.00 ÷ \$2.41 = 10.36 A P/E ratio of 10.36 means that if you invest in this company today at \$25.00 per share, you will have a return of 9.65% per year, assuming no growth. Book Value per Share 25,000 = \$3.98 \$103,000.00 ÷ Current Ratio \$99,600.00 ÷ \$88,400.00 = 1.17 Normally a current ratio this low would signal cash flow problems, but since the current portion of the note payable of \$25,000 is not due until December 31st of 20x0 and the amount in inventory is not very high, this company will be able to meet its current obligations. ROA \$39,200.00 ÷ \$39,200.00 ÷ ((\$226,000 + \$238,000)/2) = \$232,000.00 = 0.1689655 = 16.90% Management is ea...
View Full Document

## This document was uploaded on 03/23/2014.

Ask a homework question - tutors are online