Holooly Plus Logo

Question 4.22: Other Comprehensive Income in Analysis An analyst is looking...

Other Comprehensive Income in Analysis

An analyst is looking at two comparable companies. Company A has a lower price/ earnings (P/E) ratio than Company B, and the conclusion that has been suggested is that Company A is undervalued. As part of examining this conclusion, the analyst decides to explore the question: What would the company’s P/E look like if total comprehensive income per share—rather than net income per share—were used as the relevant metric?

Company A  Company B
Price $35 $30
EPS $ 1.60 $ 0.90
P/E ratio 21.9x 33.3x
Other comprehensive income (loss) $ million ($16.272) $ (1.757)
Shares (millions 22.6 25.1
The "Step-by-Step Explanation" refers to a detailed and sequential breakdown of the solution or reasoning behind the answer. This comprehensive explanation walks through each step of the answer, offering you clarity and understanding.
Our explanations are based on the best information we have, but they may not always be right or fit every situation.
The blue check mark means that this solution has been answered and checked by an expert. This guarantees that the final answer is accurate.
Learn more on how we answer questions.
Already have an account?

Related Answered Questions

Question: 4.8

Verified Answer:

The revenue for 2006 would be $280,000 (5,600 unit...