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9 November, 08:46

Winston Watches stock price is $80 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt, and $6 billion in common equity. It has 400 million shares of common stock outstanding. What is Winston's market/book ratio?

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  1. 9 November, 08:58
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    market to Book ratio 5.33

    Explanation:

    Market Capitalization

    market price x shares outstanding

    80 x 400,000,000 = 32,000,000,000 = 32 billions (short scale)

    Balance sheet:

    Assets - Liab

    10 - (1 + 3) = 10 - 4 = 6B

    Market to Book Ratio

    32 / 6 = 5.33
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