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Homework answers / question archive / Botox Facial Care had earnings after taxes of $336,000 in 20X1 with 200,000 shares of stock outstanding

Botox Facial Care had earnings after taxes of $336,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $95.60. In 20X2, earnings after taxes increased to $408,000 with the same 200,000 shares outstanding. The stock price was $104.00.

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.)

Earnings per share

P/E ratio

times

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.)

Earnings per share

?

PIE ratio

times

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

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