Earnings per Share: Earnings per share reflect the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business. Price/Earnings Ratio: The price/earnings ratio shows the market value of the amount invested to earn $1 by a company. It is major tool to be used by investors before the decisions related to investments in a company. Payout Ratio: After the calculation of earnings per share, companies declare the amount to be paid to common shareholders out of those earnings. This portion of earnings per share declared to be paid as dividends is measure by payout ratio. Times Interest Earned: Measure to evaluate the net income that can be used for interest payment on debt of a company is called times interest earned. It is a part of solvency ratios. To compute: (a) Earnings per share (b) Price/earnings ratio (c) Payout ratio (d) Times interest earned of S Company for 2017.

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Chapter 18, Problem 18.9E

To determine

Earnings per Share: Earnings per share reflect the amount earned or lost on each outstanding common equity share. It is widely used to evaluate the performance of a business.

Price/Earnings Ratio: The price/earnings ratio shows the market value of the amount invested to earn $1 by a company. It is major tool to be used by investors before the decisions related to investments in a company.

Payout Ratio: After the calculation of earnings per share, companies declare the amount to be paid to common shareholders out of those earnings. This portion of earnings per share declared to be paid as dividends is measure by payout ratio.

Times Interest Earned: Measure to evaluate the net income that can be used for interest payment on debt of a company is called times interest earned. It is a part of solvency ratios.

To compute: (a) Earnings per share (b) Price/earnings ratio (c) Payout ratio (d) Times interest earned of S Company for 2017.

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