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Question

Read the following information carefully and answer the question.

The Balance Sheet of ABC Ltd as of 31 March 2022:

LiabilitiesAmount (₹)AssetsAmount (₹)
Share capital4,00,000Fixed Assets9,50,000
Equity (₹10)-Current Assets2,34,000
12% preference shares1,00,000--
General Reserve1,84,000--
10% Debentures4,00,000--
Current Liabilities1,00,000--
Total11,84,000Total11,84,000

Additional information:

  1. Market price of share = ₹34
  2. Net profit after tax = ₹1,50,000
  3. Tax = ₹50,000

The Price Earning (P/E) ratio will be:

The correct answer is

9.86 times

P/E Ratio = Market Price Per Share ÷ Earnings Per Share (EPS).

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Important Questions from Accounting Ratios

  1. Calculate the amount of fixed obligation of the company.

  2. The return on investment will be:

  3. Earning Per Share (EPS) will be:

  4. Gross Profit Ratio of a company was 25%. If credit revenue from operation was ₹20,00,000 and cash revenue from operation is 20% of total revenue. If indirect expense of the company was ₹50,000. Calculate Net Profit Ratio?

  5. Identify the ratio, that represent one of the activity ratios.

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