BEC Ratios (Market Ratios)

Question 1

Market Capitalization

Answer 1

C/S price per share x C/S shares O/S

Question 2

Market/Book Ratio

Answer 2

Can be calculated 2 ways:

C/S price per share / BV per share
or
market capitalization / common stockholders’ equity

Question 3

Book Value Per Share: measures amount each share would receive if the company were liquidated at the amounts on the B/S

Answer 3

common stockholders’ equity / C/S shares O/S

Question 4

Price/Earnings Ratio (PE Ratio): measures the ratio of the market price per share to EPS

Answer 4

C/S price per share / EPS