The financial statements of Burnaby Mountain Trading Company are shown below.
Income Statement 2017
Sales
$7,000,000
Cost of Goods Sold
$5,000,000
Gross Profit
$2,000,000
Selling and Administrative Expenses
$1,700,000
EBIT
$300,000
Interest Expense
$50,000
Income before Tax
$250,000
Taxes
$100,000
Net Income
$150,000
Burnaby Mountain Trading Company
Comparative Balance Sheets
2017
2016
Cash
$90,000
$80,000
Accounts Receivable
$810,000
$800,000
Inventory
$800,000
$720,000
Total Current Assets
$1,700,000
$1,600,000
Fixed Assets
$2,600,000
$2,400,000
Total Assets
$4,300,000
$4,000,000
Accounts Payable
$500,000
$400,000
Bank Loans
$100,000
$100,000
Total Current Liabilities
$600,000
$500,000
Long-term Bonds
$400,000
$300,000
Total Liabilities
$1,000,000
$800,000
Common Stock (200,000 shares)
$500,000
$500,000
Retained Earnings
$2,800,000
$2,700,000
Total Equity
$3,300,000
$3,200,000
Total Liabilities and Equity
$4,300,000
$4,000,000
Note: The common shares are trading in the stock market for $27 each.
Refer to the financial statements of Burnaby Mountain Trading Company. The firm's P/E ratio for 2017 is _________.