The following information pertains to Ortiz Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 45,000 \\\text { Accounts receivable (net) } & 25,000 \\\text { Inventory } & 20,000 \\\text { Property, plant and equipment } & 210,000 \\\quad \text { Total Assets } & \$ 300,000\end{array}

\begin{array}{lr}\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 50,000 \\\text { Long-term liabilities } & 90,000 \\\text { Stockholders' equity—common } & 160,000 \\\quad \text { Total Liabilities and Stockholders' Equity } & \$ 300,000\end{array}

\begin{array}{lr}\text { Income Statement }\\\text { Sales } & \$ 100,000 \\\text { Cost of goods sold } & 55,000 \\\text { Gross profit } & 45,000 \\\text { Operating expenses } & 15,000 \\\quad \text { Net income } & \underline{30,000} \\\\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 30 \\\text { Dividends per share } & .50\end{array}

What is the price-earnings ratio for Ortiz?
A) 6.0 times
B) 1.1 times
C) 5 times
D) 5.5 times

The Current Ratio Is

Multiple Choice

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