Question

weston corporation had earnings per share of $1.41, depreciation expense of $592,800, and 240,000 shares outstanding. what was the operating cash flow per share? if the share price was $51, what was the price-cash flow ratio?

Answer 1

Answer: Price/Cash Flow = Price per share / Cash flow per share = $51 / $3.88

= 13.14

Explanation: EPS = Net income / Number of oustanding shares = $1.41

Number of shares outstanding = 240,000

So, Net income = EPS x Number of shares outstanding

= $1.41 x 240,000 = $338,400

Operating cash flow = Net income + Depreciation [Since depreciation is non-cash expense]

= $(338,400 + 592,800) = $931,200

So, Operating cash flow per share = $931,200 / 240,000 = $3.88 per share

If share price = $51, then