Calculating earnings per share, price-earnings ratio, and book value. as a stockholder in bozo oil company, you receive its annual report. in the financial statements, the firm has reported assets of $9 million, liabilities of $5 million, after-tax earnings of $2 million, and 750,000 outstanding shares of common stock.
a. calculate the earnings per share of bozo oil’s common stock.
b. assuming that a share of bozo oil’s common stock has a market value of $40, what is the firm’s price-earnings ratio?
c. calculate the book value of a share of bozo oil’s common stock.

a) EPS 2.367 dollars

b) price-earning ratio 15

c) book value of a common share 5.33

Explanation:

a) earning per share: income / shares outstanding

2,000,000 / 750,000 = 2.67

b) price / EPS

40 / 2.67 = 15

c) We determinate this using the accounting equation:

Assets = Liab + Equity

   Assets    9,000,000

  Liabilities 5,000,000

  Equity      4,000,000

equity / shares outstanding:

4,000,000 / 750,000 =  5.3333

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.

answer///video, because samuel can show his work in real time and be better understood;