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% | $900,000 |
Preferred $5 stock, $100 par | $228,000 |
Common stock, $8 par | $319,200.00 |
Income before income tax was $201,600, and income taxes were $30,600 for the current year. Cash dividends paid on common stock during the current year totaled $33,516. The common stock was selling for $28 per 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, 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. Times interest earned ratio => EBIT/Interest
ie., = (201600+72000)/72000 = 3.8 Times
b. EPS on common stock = (EBT - Tax - Pref. dividend)/No of common stock
ie., (201600 - 30600 - (NA))/(319200/8) => 4.29 $ per share.
c. PE Ratio => Market value per share/EPS ie., 28/4.29 = 6.5 Times
d. Dividend per share => $ 33516/39900 = $ 0.84/ share
e. Dividend yield = Dividend per share/Current market price*100 => 0.84/28*100 = 3%
Five Measures of Solvency or Profitability The balance sheet for Garcon Inc. at the end of...
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% $1,000,000 Preferred $5 stock, $50 par 146,000 Common stock, $11 par 192,720.00 Income before income tax was $224,000, and income taxes were $34,200 for the current year. Cash dividends paid on common stock during the current year totaled $43,800. The common stock was selling for $100 per share at the end of the year....
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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, 10% Preferred $5 stock, $50 par Common stock, $6 par Income before income tax was $390,000, and income taxes were $57,950 for the current year. Cash dividends paid on common stock during the current year totaled S55,647. The common stock was selling for $18 per share at the end of the year Determine each of...
17-21 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, 10% $1,700,000 Preferred $10 stock, $100 par 196,000 Common stock, $11 par 689,920.00 Income before income tax was $391,000, and income taxes were $57,800 for the current year. Cash dividends paid on common stock during the current year totaled $125,440. The common stock was selling for $50 per share at the end of the...
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, 6% $1,000,000 Preferred $10 stock, $50 par 43,000 Common stock, $10 par 795,500.00 Income before income tax was $198,000, and income taxes were $30,300 for the current year. Cash dividends paid on common stock during the current year totaled $21,479. The common stock was selling for $18 per share at the end of the year....
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