Question
If you were an investor analyzing financial statements, what would the following drastic change in Price Earnings tell you about a company? Year Market Price
If you were an investor analyzing financial statements, what would the following drastic change in Price Earnings tell you about a company?
| Year | Market Price per Share | Earnings per Share |
| 2020 | 112.23 | 5.22 |
| 2019 | 94.23 | 2.28 |
Result
2020 Price Earnings= 21.5 times
2019 Price Earnings= 41.33 times
What does the doubling in Earnings per Share mean for an investor?
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Managerial Accounting A Focus on Ethical Decision Making
Authors: Steve Jackson, Roby Sawyers, Greg Jenkins
5th edition
324663854, 978-0324663853
