Five Measures of Solvency or ProfitabilityThe balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following:Bonds payable, 10%$1,800,000Preferred $10 stock, $100 par273,000Common stock, $8 par709,800Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pershare at the end of the year.Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, ifrequired.a. Times interest earned ratio3.5timesb. Earnings per share on common stock2$4.40Xc. Price-earnings ratio2.8Xd. Dividends per share of common stock$1.14Dividend yield4 х %е.FeedbackV Check My Worka. Divide the sum of income before income tax plus interest expense by interest expense. Interest equals the bond payable amount times the interest rate on the bonds.b. Divide net income (which is income before taxes less income taxes) minus preferred dividends by common shares outstanding (common stock ÷ par value).c. Dividemarket share price (or selling price at the end of the year) byearnings per share (from requirement c).d. Divide common dividends by common shares outstanding (common stock ÷ par value).e. Divide common dividends per share (from requirement e) by share price (or selling price at the end of the year).

Five Measures of Solvency or Profitability The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% $1,800,000 Preferred $10 stock, $100 par 273,000 Common stock, $8 par 709,800 Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pe share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, required. a. Times interest earned ratio 3.5 v times b. Earnings per share on common stock 4.40 x c. Price-earnings ratio 2.8 x

Five Measures of Solvency or Profitability The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% $1,800,000 Preferred $10 stock, $100 par 273,000 Common stock, $8 par 709,800 Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pe share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, required. a. Times interest earned ratio 3.5 v times b. Earnings per share on common stock 4.40 x c. Price-earnings ratio 2.8 x

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 20E

See similar textbooks

Similar questions

Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the dividends paid to common stockholders for last year were 2,600,000 and that the market price per share of common stock is 51.50. Required: 1. Compute the dividends per share. 2. Compute the dividend yield. (Note: Round to two decimal places.) 3. Compute the dividend payout ratio. (Note: Round to two decimal places.)
Given the following year-end information, compute Greenwood Corporations basic and diluted earnings per share. Net income, 15,000 The income tax rate, 30% 4,000 shares of common stock were outstanding the entire year. shares of 10%, 50 par (and issuance price) convertible preferred stock were outstanding the entire year. Dividends of 2,500 were declared on this stock during the year. Each share of preferred stock is convertible into 5 shares of common stock.
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Also, assume that the market price per share for Rebert is 51.50. Required: 1. Compute the dollar amount of preferred dividends. 2. Compute the number of common shares. 3. Compute earnings per share. (Note: Round to two decimals.) 4. Compute the price-earnings ratio. (Note: Round to the nearest whole number.)
Errol Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is the numerator of the EPS calculation for Errol?
Income Statement Ratio The income statement of Holly Enterprises shows operating revenues of $134,800, selling expenses of $38,310, general and administrative expenses of $36,990, interest expense of $580, and income tax expense of $13,920. Hollys stockholders equity was $280,000 at the beginning of the year and $320,000 at the end of the year. The company has 20,000 shares of stock outstanding at the end of the year. Required Compute Hollys profit margin. What other information would you need in order to comment on whether this ratio is favorable?
Given the following year-end information for Somerset Corporation, compute its basic earnings per share. Net income, 13,000 Preferred dividends declared, 4,000 Weighted average common shares for the year, 4,500
Longmont Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is the numerator of the EPS calculation for Longmont?
Common stock transactions on the statement of cash flows Jones Industries received 600,000 from issuing shares of its common stock and 400,000 from issuing bonds. During the year, Jones Industries also paid dividends of 60,000. How are the effects of these transactions reported on the statement of cash flows?
Bastion Corporation earned net income of $200,000 this year. The company began the year with 10,000 shares of common stock and issued 5,000 more on April 1. They issued $7,500 in preferred dividends for the year. What is the EPS for the year for Bastion?
James Corporation earned net income of $90,000 this year. The company began the year with 600 shares of common stock and issued 500 more on April 1. They issued $5,000 in preferred dividends for the year. What is the EPS for the year for James (rounded to the nearest dollar)?
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
Rebert Inc. showed the following balances for last year: Reberts net income for last year was 3,182,000. Refer to the information for Rebert Inc. above. Required: 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.