Compute earnings per share and the P-E ratio

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Reference no: EM131822488

Botox Facial Care had earnings after taxes of $348,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $77.80. In 20X2, earnings after taxes increased to $420,000 with the same 200,000 shares outstanding. The stock price was $95.00.

a. Compute earnings per share and the P/E ratio for 20X1. (The P/E ratio equals the stock price divided by earnings per share.) (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

b. Compute earnings per share and the P/E ratio for 20X2. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

c. Why did the P/E ratio change? (Do not round intemediate calculations. Input your answers as percents rounded to 2 decimal places.)

Reference no: EM131822488

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