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What is price-to-sales ratio? It is net income / number of shares. It is price / sales per share. It is price / book equity per share. It is price / earings per share. QUESTION 10 JCPenny has the price sales ratio of 0.03 while the industry average price/sales ratio is 1.54. Based on the information, you find that JCPenny's current stock price is low based on the price/sales ratio. JCPenny's current stock price is high based on the price/sales ratio. JCPenny's current price is fair based on the price/sales ratio. None of the above. QUESTION 11 What is PE ratio? It is price / earnings per share. It is net income / number of shares. It is price / sales per share. It is price / book equity per share. QUESTION 12 Which of the following statements about PE ratio is NOT true? PE ratio usually varies across industries. A low PE ratio indicates that the firm has significant prospects for future growth It measures how much investors are willing to pay per dollar of current earnings. Alhgh PE ratio indicates the current stock price might be high. Microsoft has sales of $110,360 million, net income of $16,571 million, total equity of $87,718 million, and 7,660 million shares outstanding. Its current stock price is $137. Compute its PE ratio. 2.16 63.33 9.51 11.96 QUESTION 14 What are the three components for ROE in Du Pont Identity? Net profit margin, total asset turnover, and debt equity ratio Net profit margin, inventory turnover, and equity multiplier Net profit margin, total asset turnover, and equity multiplier Current ratio, total asset turnover, and equity multiplier

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