124. Percentage changesSelected information from the financial statements of Perfectly Baked : 1267480
124. Percentage changes
Selected information from the financial statements of Perfectly Baked Cake Co. appears below:
(a) Compute the percentage change in each of the above items from 2010 to 2011. Use a + or - to indicate increase or decrease.
(b) Compute net income as a percentage of net sales in each year. (Round to the nearest one-tenth of 1%)
125. Percentage changes; p/e ratios and investors' expectations
Shown below are Gamma, Inc.'s earnings per share for a four-year period, along with the per-share market price of the company's stock at each year-end. The earnings in 2011 were the highest in the company's history.
(a) Compute the percentage change in earnings per share in 2009, 2010, and 2011. (Place your answers in the spaces provided above.)
(b) Compute the p/e ratio of stock at the end of each of the four years. (Place your answers in the spaces provided above.)
(c) What does the p/e ratio at the end of 2011 indicate about investors' expectations of earnings per share for the coming year? Explain your reasoning.