Here is the income statement for Splish Brothers Inc.SPLISH BROTHERS INC.Income StatementFor the Year Ended December 31, 2022Net sales $442,900Cost of goods sold 258,800Gross profit 184,100Expenses (including $16,100 interest and $21,600 income taxes) 74,700Net income $ 109,400Additional information:1. Common stock outstanding January 1, 2022, was 22,500 shares, and 35,800 shares were outstanding at December 31, 2022. (Use a simple average for weighted-average.)2. The market price of Splish Brothers stock was $15 on December 31, 2022.3. Cash dividends of $23,600 were declared and paid.Compute the following measures for 2022. (Round earnings per share to 2 decimal places, e.g. 1.83 and all answers to 1 decimal places, e.g. 1.8 or 2.5%)(a) Earnings per share $enter Earnings per share in dollars rounded to 2 decimal places (b) Price-earnings ratio enter a number for Price-earnings ratio in times rounded to 1 decimal place times(c) Payout ratio enter Payout ratio in percentages rounded to 1 decimal place %(d) Times interest earned enter a number for Times interest earned rounded to 1 decimal place times

RATIO ANALYSISRatio analysis is the process of determining and interpreting numerical relationships based on financial statements. Ratio analysis provides a measure of the relationship between variables or figures. This relationship can be expressed as percent or as a quotient.Ratio analysis helps to measure the Liquidity position, Solvency Position & Operating Efficiency of an Organisation. I) Average Number of Common Stock := (Number of Common Stock at Beginning + Number of Common Stock at Ending) ÷ 2= (22,500 + 35,800) ÷ 2= 29,150II) Earnings Per Share :Net Income $109,400Less :— Dividend Paid ($23,600)I) Net Income for Common Stockholders Equity $85,800II) Average Number of Common Shares 29,150Earnings Per Share (I ÷ II)$2.94III) Price Earnings Ratio := Market Price ÷ Earnings Per Share= $15.00 ÷ $2.94= 5.1 TimesIV) Payout Ratio := (Dividends ÷ Net Income) * 100= ($23,600 ÷ $109,400) * 100= 21.6%Net Income$109,800 Add :— Income Tax $21,600Add :— Interest Expense $16,100I) Earnings Before Interest & Taxes$147,100II) Interest Expense $16,100Time Interest Earned Ratio (I ÷ II) 9.1 TimesREQUIREMENT # :— FINAL ANSWERRequirement #1 :— Earnings Per Share $2.94Price Earnings Ratio 5.1TimesPayout Ratio 21.6%Time Interest Earned Ratio 9.1Times

Answered: Here is the income statement for Splish…

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

Here is the income statement for Splish Brothers Inc.

SPLISH BROTHERS INC. Income Statement For the Year Ended December 31, 2022
Net sales		$442,900
Cost of goods sold		258,800
Gross profit		184,100
Expenses (including $16,100 interest and $21,600 income taxes)		74,700
Net income		$ 109,400

Additional information:

1.		Common stock outstanding January 1, 2022, was 22,500 shares, and 35,800 shares were outstanding at December 31, 2022. (Use a simple average for weighted-average.)
2.		The market price of Splish Brothers stock was $15 on December 31, 2022.
3.		Cash dividends of $23,600 were declared and paid.

Compute the following measures for 2022. (Round earnings per share to 2 decimal places, e.g. 1.83 and all answers to 1 decimal places, e.g. 1.8 or 2.5%)

(a)	Earnings per share	$enter Earnings per share in dollars rounded to 2 decimal places
(b)	Price-earnings ratio	enter a number for Price-earnings ratio in times rounded to 1 decimal place	times
(c)	Payout ratio	enter Payout ratio in percentages rounded to 1 decimal place	%
(d)	Times interest earned	enter a number for Times interest earned rounded to 1 decimal place	times