Information for three well-known companies from their lastannual financial statements is given below:
Apple,Inc. General Motors Procter & Gamble
NetIncome $53,394 million $9,687million $7,036 million
TotalAssets $290,479 million $194,520million $129,495 million
Total Liabilities $171,124 million $154,197million $66,445 million
Total Shareholdersâ
Equity $119,355million $ 40,323million $63,050 million
Number of Shares
Outstanding 5,578.753 million 1,586million 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 companyâs Net Book Value perShare?
Net Book Value per Share = Shareholdersâ Equity
Number of Shares Outstanding
2. What is the Market to Book Ratio for eachcompany?
Market to Book Ratio = Market Price perShare
Net Book Value per Share
3. Explain why shareholders value each companyat so much more than the Net Book Value of each company, and whythere is so much variation between companies. Does this indicate aproblem with the accounting valuation of each company? What doesthis say about the adequacy of accounting numbers to explain marketvaluations? What else might explain these differences?
Information for three well-known companies from their lastannual financial statements is given below:
Apple,Inc. General Motors Procter & Gamble
NetIncome $53,394 million $9,687million $7,036 million
TotalAssets $290,479 million $194,520million $129,495 million
Total Liabilities $171,124 million $154,197million $66,445 million
Total Shareholdersâ
Equity $119,355million $ 40,323million $63,050 million
Number of Shares
Outstanding 5,578.753 million 1,586million 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 companyâs Net Book Value perShare?
Net Book Value per Share = Shareholdersâ Equity
Number of Shares Outstanding
2. What is the Market to Book Ratio for eachcompany?
Market to Book Ratio = Market Price perShare
Net Book Value per Share
3. Explain why shareholders value each companyat so much more than the Net Book Value of each company, and whythere is so much variation between companies. Does this indicate aproblem with the accounting valuation of each company? What doesthis say about the adequacy of accounting numbers to explain marketvaluations? What else might explain these differences?
