BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 17, Problem 17.11BPE
Textbook Problem

Earnings per share and price-earnings ratio

A company reports the following:

Net income $410,000
Preferred dividends 560,000
Share of common stock outstanding 50,000
Market price per share of common stock $84

a. Determine the company’s earnings per share on common stock.

b. Determine the company’s price-earnings ratio. Round to one decimal place.

Expert Solution

a)

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.

To calculate: Earnings per share.

Given info: Net income, preference dividends, shares of common stock outstanding

Explanation of Solution

Explanation

A portion of profit that an individual earns from each share is referred to earnings per share.

Formula:

Earnings per share

Expert Solution

b)

To determine

To calculate: Price earnings ratio

Given info: Earnings per share (Requirement 1) and Market price per share

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Chapter 17 Solutions

Accounting
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Ch. 17 - Horizontal analysis The comparative temporary...Ch. 17 - Horizontal analysis The comparative accounts...Ch. 17 - Vertical analysis Income statement information for...Ch. 17 - Vertical analysis Income statement information for...Ch. 17 - Current position analysis The following items are...Ch. 17 - Current position analysis The followingitems are...Ch. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Long-term solvency analysis The following...Ch. 17 - Long-term solvency analysis The following...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Vertical analysts of income statement Revenue and...Ch. 17 - Vertical analysis of income statement The...Ch. 17 - Common-sized income statement Revenue and expense...Ch. 17 - Vertical analysis of balance sheet Balance sheet...Ch. 17 - Horizontal analysis of the income statement Income...Ch. 17 - Current position analysis The following data were...Ch. 17 - Current position analysis PepsiCo, Inc., the...Ch. 17 - Current position analysis The bond indenture for...Ch. 17 - Accounts receivable analysis The following data...Ch. 17 - Accounts receivable analysis Xavier Scores Company...Ch. 17 - Inventory analysis The following data were...Ch. 17 - Inventory analysis QT, Inc. and Elppa Computers,...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Asset turnover Three major segments of the...Ch. 17 - Profitability ratios The following selected data...Ch. 17 - Profitability ratios Ralph Lauren Corporation...Ch. 17 - Six measures of solvency or profitability The...Ch. 17 - Five measures of solvency or profitability The...Ch. 17 - Earnings per share, price-earnings ratio, dividend...Ch. 17 - Price-earnings ratio; dividend yield The table...Ch. 17 - Earnings per share, discontinued operations The...Ch. 17 - Income statement and earnings per share for...Ch. 17 - Unusual items Explain whether Colston Company...Ch. 17 - Horizontal analysis of income statement For 20Y2,...Ch. 17 - Vertical analysis of income statement For 20Y2,...Ch. 17 - Effect of transactions on current position...Ch. 17 - Measures of liquidity, solvency, and profitability...Ch. 17 - Solvency and profitability trend analysis Addai...Ch. 17 - Horizontal analysis of income statement For 20Y2,...Ch. 17 - Vertical analysis of income statement For 20Y2,...Ch. 17 - Effect of transactions on current position...Ch. 17 - Measures of liquidity, solvency and profitability...Ch. 17 - Solvency and profitability trend analysis Crosby...Ch. 17 - Financial statement analysis The financial...Ch. 17 - Ethics in Action Rodgers Industries Inc. completed...Ch. 17 - Communication The president of Freeman Industries...Ch. 17 - Common-sized income statements The condensed...Ch. 17 - Profitability analysis Deere Company manufactures...Ch. 17 - Comprehensive profitability and solvency analysis...

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