Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Chapter 14, Problem 20E
Five measures of solvency or profitability
The
Income before income tax expense was $3,000,000, and income taxes were $1,200,000 for the current year. Cash dividends paid on common stock during the current year totaled $1,200,000. The common stock was selling for $32 per share at the end of the year. Determine each of the following: (A) times interest earned ratio (B) earnings per share on common stock, (C) price-earnings ratio, (D) dividends per share of common stock, and (e) dividend yield. Round ratios and percentages to one decimal place, except for per-share amounts.
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Five Measures of Solvency or Profitability
The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:
Bonds payable, 8%
$5,000,000
Preferred $4 stock, $50 par
$2,500,000
Common stock, $10 par
$5,000,000
Income before income tax was $3,000,000, and income taxes were $1,200,000 for the current year. Cash dividends paid on common stock during the current year totaled $1,200,000. The common stock was selling for $32 per share at the end of the year.
Determine each of the following. Round to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required.
a. Times interest earned ratio
times
b. Earnings per share on common stock
$
c. Price-earnings ratio
d. Dividends per share of common stock
$
e. Dividend yield
A company reports the following year-end data: Sales of $100,000; Earnings per share of $5; Market price per (common) share of $50;
and Annual cash dividends per share of $2. Compute the (a) dividend yield and (b) price-earnings ratio.
Complete this question by entering your answers in the tabs below.
Price Earnings
Ratio
Compute the dividend yield.
Dividend Yield
Choose Numerator:
Dividend Yield Price Earnings
Ratio
Dividend Yield
Choose Denominator:
A company reports the following year-end data: Sales of $100,000; Earnings per share of $5; Market price per (common) share of $50;
and Annual cash dividends per share of $2. Compute the (a) dividend yield and (b) price-earnings ratio.
Complete this question by entering your answers in the tabs below.
Compute the price-earnings ratio.
Choose Numerator:
Price-Earnings Ratio
/ Choose Denominator:
Dividend yield
Price Earnings Ratio >
Footfall Manufacturing Ltd. reports the following financial information at the end of the current year:
Net sales
$100.000
Debtors’ turnover ratio (based on sales)
2
Inventory turnover ratio
1.25
Fixed assets turnover ratio
0.8
Debt to assets ratio
0.6
Net profit margin
5%
Gross profit margin
25%
Return on investment
2%
Use the given information to fill out the templates for the income statement and balance sheet given below:
Income Statement of Footfall Manufacturing Ltd. for the year ending December 31, 20XX
(in $)
Sales
100,000
Cost of goods sold
Gross profit
Other expenses
Earnings before tax
Tax @ 50%
Earnings after tax
Balance Sheet of Footfall Manufacturing Ltd. as at December 31, 20XX (in $)
Liabilities
Amount
Assets
Amount
Equity
Net fixed assets
Long term debt
50,000
Inventory
Short term debt
Debtors
Cash…
Chapter 14 Solutions
Financial And Managerial Accounting
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - How would the current and quick ratios of a...Ch. 14 - Prob. 5DQCh. 14 - What do the following data, taken from a...Ch. 14 - A. How does the return on total assets differ from...Ch. 14 - The Kroger Company (KR), a grocery store chain,...Ch. 14 - The dividend yield of Suburban Propane Partners,...Ch. 14 - Prob. 10DQ
Ch. 14 - Prob. 1BECh. 14 - Income statement information for Einsworth...Ch. 14 - Prob. 3BECh. 14 - A company reports the following: Determine (a) the...Ch. 14 - Prob. 5BECh. 14 - Prob. 6BECh. 14 - A company reports the following: Determine the...Ch. 14 - A company reports the following: Determine the...Ch. 14 - Prob. 9BECh. 14 - A company reports the following: Determine (a) the...Ch. 14 - Prob. 11BECh. 14 - Vertical analysis of income statement Revenue and...Ch. 14 - The following comparative income statement (in...Ch. 14 - Common-sized income statement Revenue and expense...Ch. 14 - Prob. 4ECh. 14 - Prob. 5ECh. 14 - The following data were taken from the balance...Ch. 14 - PepsiCo, Inc. (PEP), the parent company of...Ch. 14 - Current position analysis The bond indenture for...Ch. 14 - Accounts receivable analysis The following data...Ch. 14 - Prob. 10ECh. 14 - Inventory analysis The following data were...Ch. 14 - Inventory analysis QT, Inc. and Elppa Computers,...Ch. 14 - Ratio of liabilities to stockholders equity and...Ch. 14 - Hasbro, Inc. (HAS), and Mattel, Inc. (MAT), are...Ch. 14 - Recent balance sheet information for two companies...Ch. 14 - Prob. 16ECh. 14 - The following selected data were taken from the...Ch. 14 - Ralph Lauren Corporation (RL) sells apparel...Ch. 14 - Six measures of solvency or profitability Obj. 4,...Ch. 14 - Five measures of solvency or profitability The...Ch. 14 - Prob. 21ECh. 14 - The table that follows shows the stock price,...Ch. 14 - Earnings per share, discontinued operations The...Ch. 14 - Income statement and earnings per share for...Ch. 14 - Unusual items Explain whether Colston Company...Ch. 14 - Comprehensive income Anson Industries, Inc.,...Ch. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Effect of transactions on current position...Ch. 14 - Measures of liquidity, solvency, and profitability...Ch. 14 - Solvency and profitability trend analysis Addai...Ch. 14 - Horizontal analysis of income statement For 20Y2,...Ch. 14 - Prob. 2PBCh. 14 - Effect of transactions on current position...Ch. 14 - Prob. 4PBCh. 14 - Solvency and profitability trend analysis Crosby...Ch. 14 - Prob. 1MADCh. 14 - Prob. 2MADCh. 14 - Deere Company (DE) manufactures and distributes...Ch. 14 - Marriott International, Inc. (MAR), and Hyatt...Ch. 14 - Prob. 1TIFCh. 14 - Real-world annual report The financial statements...Ch. 14 - Prob. 3TIF
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