Problem 4EINANCIAL RATIOS. The Format Company reports the following balance sheet data:Current liabilities$280.000Bonds payable, 16%$120,000Preferred stock, 14%, $100 par value $200,000Common stock $25 par value, 16.800 shares $420.000Paid-in capital on common stock$240,000reRetained earnings$180,000Income before taxes is $160,000. The tax rate is 40 percent. Common stockholders'equity in the previous year was $800,000. The market price per share of common stockis $35.Requirement:Calculate the following:a. Net incomne;t. Preferred dividends;L, Return on common stock,d. Times interest earned;e. Earnings per share;f. Price/earnings ratio; andg. Book value per share.Pnoldata relative to

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d. Times interest earned; e. Earnings per share; f. Price/earnings ratio; and

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problem 4
EINANCIAL RATIOS. The Format Company reports the following balance sheet data:
Current liabilities
$280.000
Bonds payable, 16%
$120,000
Preferred stock, 14%, $100 par value $200,000
Common stock $25 par value, 16.800 shares $420.000
Paid-in capital on common stock
$240,000
re
Retained earnings
$180,000
Income before taxes is $160,000. The tax rate is 40 percent. Common stockholders'
equity in the previous year was $800,000. The market price per share of common stock
is $35.
Requirement:
Calculate the following:
a. Net incomne;
t. Preferred dividends;
L, Return on common stock,
d. Times interest earned;
e. Earnings per share;
f. Price/earnings ratio; and
g. Book value per share.
Pnol
data relative to

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