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Question four: You are required to calculate and explain the following ratios for Bright Star Company for the year ended 30 June 2021: o earnings

Question four: You are required to calculate and explain the following ratios for Bright Star Company for the year ended 30 June 2021:

o earnings per share

o price earnings ratio.

4. Earning per share= ( PROFIT/ WEIGHT AVERAGE NUMBER OF SHARES ON ISSUE)

= (1,652 / 500)

= 3.3

Price earnings ratio ( MARKET PRICE PER ORDINARY SHARE/ EARNINGS PER SHARE)

= (31.20/ 3.3)

= 9.45

Could you please also explain what these specific ratios mean?

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