Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total bookvalue of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a totalasset turnover of 1.5.What is the market –to- book ratio?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
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Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 13P
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Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total book
value of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a total
asset turnover of 1.5.What is the market –to- book ratio?

Expert Solution
Step 1 What is market to book ratio?

Market to book value is the ratio of a stock's market price and a book value of a share. It is a representation of a stock's worth with respect to its book value.

Market/book value=Market value per shareBook value per share

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