Accounting Multiple Choice Question – 4 September 2021

The Profit and Loss Account of a limited company is shown below:

The company has issued 100,000 ordinary shares of £1 each. Their current market price is £12.

What is the company’s price earnings ratio?

Select ONE answer:

1. 1.5
2. 2
3. 3
4. 6

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct ==> (£400,000 / 100,000) = 4 ==> £12 / 4 = 3
4. Not correct

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