Otis Company's income statement information follows: Year 3 Year 2 Net sales $480,000 $320,000 Income before interest and taxes 000'86 000'ZL 000'8 Net income after taxes Interest expense 000'18 000'6 000'008 Stockholders' equity, December 31 (Year 1: $200,000) Common stock, December 31 000'0BZ 000'00z 240,000 The average number of shares outstanding was 9,600 for Year 3 and 8,000 for Year 2 Required Compute the following ratios for Otis for Year 3 and Year 2. 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 answe c. Price-earnings ratio (market prices: Year 3. $64 per share; Year 2, $78 per share). (Round inte answers to 2 decimal places.) d. Return on average equity. (Round your answers to 2 decimal places. (i.e., .2345 should be e. Net margin. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23 Year 3 Year 2 13.33 times 12.25 times a. Times interest earned 00 6 8.67 times 8.44 b. Earnings per share 7.59 times c. Price-earnings ratio d. Return on average equity e. Net margin

Otis Company's income statement information follows: Year 3 Year 2 Net sales $480,000 $320,000 Income before interest and taxes 000'86 000'ZL 000'8 Net income after taxes Interest expense 000'18 000'6 000'008 Stockholders' equity, December 31 (Year 1: $200,000) Common stock, December 31 000'0BZ 000'00z 240,000 The average number of shares outstanding was 9,600 for Year 3 and 8,000 for Year 2 Required Compute the following ratios for Otis for Year 3 and Year 2. 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 answe c. Price-earnings ratio (market prices: Year 3. $64 per share; Year 2, $78 per share). (Round inte answers to 2 decimal places.) d. Return on average equity. (Round your answers to 2 decimal places. (i.e., .2345 should be e. Net margin. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23 Year 3 Year 2 13.33 times 12.25 times a. Times interest earned 00 6 8.67 times 8.44 b. Earnings per share 7.59 times c. Price-earnings ratio d. Return on average equity e. Net margin

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 5E: Multiple-Step and Single-Step In coin Statements The following items were derived from Gold...

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The comparative statements of Osborne Company are presented here: [{HtmlTableOSBORNE COMPANYIncome StatementsFor the Years Ended December 312014 2013Net sales $1,895,999 $1,755,959Cost of goods sold 1,063,999 1,011,459Gross profit 832,000 744,500Selling and administrative expenses 505,459 484,459Income from operations 326,541 260,041Other expenses and losses Interest expense 23,583 21,583Income before income taxes 302,958 238,458Income tax expense 93,583 74,583Net income $209,375 $163,875\\OSBORNE COMPANYBalance SheetsDecember 31Assets 2014 2013Current assets Cash $60,100 $64,200Debt investments (short-term) 74,000 50,000Accounts receivable 123,259 108,259Inventory 127,583 117,083Total current assets 384,942 339,542Plant assets (net) 663,905 535,205Total assets $1,048,847 $874,747Liabilities and Stockholders' Equity Current liabilities Accounts payable $165,459 $150,859Income taxes payable 45,083 43,583Total current liabilities 210,542 194,442Bonds payable 234,905 214,905Total…