Homework Help is Here – Start Your Trial Now!
Business
Accounting
Gibson Company's income statement information follows: Net sales Income before interest and taxes Net income after taxes Interest expense stockholders' equity, December 31 (Year 1: $195,000) Common stock, December 31 Year 3 Year 2 $420,000 $253,000 114,000 55,160 8,850 309,000 195,000 76,000 63,000 7,900 243,000 172,500 The average number of shares outstanding was 7,800 for Year 3 and 6,900 for Year 2. Required Compute the following ratios for Gibson for Year 3 and Year 2.

Gibson Company's income statement information follows: Net sales Income before interest and taxes Net income after taxes Interest expense stockholders' equity, December 31 (Year 1: $195,000) Common stock, December 31 Year 3 Year 2 $420,000 $253,000 114,000 55,160 8,850 309,000 195,000 76,000 63,000 7,900 243,000 172,500 The average number of shares outstanding was 7,800 for Year 3 and 6,900 for Year 2. Required Compute the following ratios for Gibson for Year 3 and Year 2.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please Do not Give image format
Gibson Company's Income statement Information follows: Net sales Income before interest and taxes Net income after taxes Interest expense stockholders' equity, December 31 (Year 1: $195,000) Common stock, December 31 a. Times interest earned b. Earnings per share c. Price-earnings ratio d. Return on average equity e. Net margin Year 3 The average number of shares outstanding was 7,800 for Year 3 and 6,900 for Year 2. Required Compute the following ratios for Gibson for Year 3 and Year 2. times Year 3 $420,000 a. Number of times interest was earned. (Round your answers to 2 decimal places.) b. Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.) c. Price-earnings ratio (market prices: Year 3, $66 per share; Year 2, $78 per share). (Round your Intermediate and final answers to 2 decimal places.) d. Return on average equity. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) e. Net margin. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) times % % 114,000 55,160 Year 2 8,850 309,000 243,000 195,000 172,500 Year 2 $253,000 76,000 63,000 7,900 times times % %
Transcribed Image Text:Gibson Company's Income statement Information follows: Net sales Income before interest and taxes Net income after taxes Interest expense stockholders' equity, December 31 (Year 1: $195,000) Common stock, December 31 a. Times interest earned b. Earnings per share c. Price-earnings ratio d. Return on average equity e. Net margin Year 3 The average number of shares outstanding was 7,800 for Year 3 and 6,900 for Year 2. Required Compute the following ratios for Gibson for Year 3 and Year 2. times Year 3 $420,000 a. Number of times interest was earned. (Round your answers to 2 decimal places.) b. Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.) c. Price-earnings ratio (market prices: Year 3, $66 per share; Year 2, $78 per share). (Round your Intermediate and final answers to 2 decimal places.) d. Return on average equity. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) e. Net margin. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) times % % 114,000 55,160 Year 2 8,850 309,000 243,000 195,000 172,500 Year 2 $253,000 76,000 63,000 7,900 times times % %
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Balance Sheet Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS