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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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