Information for three well-known companies from their last annual financial statements is given below:

Apple, Inc. General Motors Procter & Gamble

Net Income $53,394 million $9,687 million $7,036 million

Total Assets $290,479 million $194,520 million $129,495 million

Total Liabilities $171,124 million $154,197 million $66,445 million

Total Shareholders

Equity $119,355 million $ 40,323 million $63,050 million

Number of Shares Outstanding 5,578.753 million 1,586 million 2,714.571 million

Market Price per Share $114.71 $34.01 $84.67

Earnings per Share $9.28 $6.11 $2.50

Questions to address in your Discussion Board posting:

1. What is each companys Net Book Value per Share?

Net Book Value per Share = Shareholders Equity Number of Shares Outstanding

2. What is the Market to Book Ratio for each company?

Market to Book Ratio = Market Price per Share Net Book Value per Share

3. Explain why shareholders value each company at so much more than the Net Book Value of each company, and why there is so much variation between companies. Does this indicate a problem with the accounting valuation of each company? What does this say about the adequacy of accounting numbers to explain market valuations? What else might explain these differences?