Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

Exercise 17

Teams are to select an industry, and each team member is to select a different company in that industry. Each team member then is to acquire the selected company's financial statements (or Form 10-K) from the SEC site ( www.SEC.gov ). Use these data to identify basic EPS. Use the financial press (or finance.yahoo.com ) to determine the market price of this stock, and then compute the price-earnings ratio. Communicate with teammates via a meeting, e-mail, or telephone to discuss the meaning of this ratio, how companies compare, and the industry norm. The team must prepare a single memorandum reporting the ratio for each company and identifying the team conclusions or consensus of opinion. The memorandum is to be duplicated and distributed to the instructor and teammates.