Wk3 DQ1( need discussion for this)

Discussion Question 1 – CLO 1, CLO 3

Calculating Market Value Ratios [LO2] Makes Corp. had addition to retained earnings for the year just ended of $395,000. The firm paid out $195,000 in cash dividend, and it has ending total equity of $5.3 million.

a. If the company currently has 170,000 shares of common stock outstanding, what are earnings per share?

b. Dividends per share?

c. Book value of share?

d. If the stock currently sells for $64 per share, what is the market-to-book ratio?

e. The price-earnings ratio?

f. The company had sales of 5.15 million, what is the price-sales ratio?

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(Need Reply for this)

Wk3 DQ1

by

Pranav Chandrashekhar Purohit

 – Tuesday, January 21, 2020, 5:30 PM

Number of replies: 0

Earninngs per share (EPS) = net income / shares of common stock

                                               = (retained earnings + dividends paid out) / shares of common stock

                                               = (395,000 + 195,000) / 170,000

                                               = 3.47

Dividends per share (DPS) = dividends paid out / shares of common stock

                                                = 195,000 / 170,000

                                                = 1.147

Book value per share (BVPS) = total equity / shares of common stock

                                                   = 5,300,000/170,000

                                                   = 31.17

Market to book ratio = market value of shares / book value of shares

                                      = 64/31.17

                                      = 2.05

Price earnings ratio (PE Ratio) = market value of shares / earnings per share

                                                      = 64/ 3.47

                                                      = 18.44

Price-sales ratio = (market value of shares * number of outstanding stocks) /sales price

                             = (64 * 170,000) / 5,150,000

                             = 2.11

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Wk3 DQ2 ( need discussion for this)

Discussion Question 2 – Week/Course Learning Outcomes

 Using your textbook, LIRN-based research, and the Internet, apply the learning outcomes for the week/course and lecture concepts to one of the following scenarios:

As applied to your current professional career

As applied to enhancing, improving, or advancing your current professional career

As applied to a management, leadership, or any decision-making position

As applied to a current or future entrepreneurial endeavor

OR

Using your textbook, LIRN-based research, and the Internet, apply the learning outcomes for the week/course and lecture concepts to a business organization that exhibits and demonstrates these concepts. You should develop a summary of the organizations strategy and how they use these concepts to compete.

This is a learning and application exercise designed to give you an opportunity to apply concepts learned in a pragmatic and meaningful way that will enable you to gain valuable and relevant knowledge in an effort to augment your skill set and enhance your professional careers.

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wk3 dq2

Organizing company finances and maintaining corporate financial planning – regardless of the size of the business – are indispensable practices today for those who want to see their company grow and advance in such a competitive market. In practice, however, many managers neglect this essential step, and end up experiencing unease and a series of problems involving the company’s capital.

As in the future I want to have my own company, chapter 4 on financial planning has helped me a lot to know which paths to take in order to make my future business healthy. For this, I will follow the following steps:

Know the company’s situation

Taking a business balance sheet can also help to organize finances and plan the next steps of the business in relation to money. In this way I will be able to direct efforts to areas most in need, project investments and even plan changes to be made along the way.

Project distinct scenarios

Making projections of different scenarios within the business is essential in financial planning. Whenever possible, three different scenarios should be defined and planning based on each of these pre-established contexts.

Make plans and follow them

At this stage, the objective is to draw up plans for the company, not forgetting to insert goals and objectives regarding finances, staff, the market and the results that I hope to achieve in the short, medium and long term.

Based on these definitions, I will be able to align the financial planning of the business with the objectives to be achieved by the company and, from there, follow a direction that can effectively elevate the company and make it grow against its competitors.

Reference:

Ross, S. A., Westerfield, R. W., Jordan, R. D., (2016). Fundamentals of corporate finance (12th ed.).New York, NY: McGraw-Hill