Question
Baird Companys income statement information follows: Year 3 Year 2 Net sales $ 426,000 $ 262,000 Income before interest and taxes 118,000 77,000 Net income
Baird Companys income statement information follows:
| Year 3 | Year 2 | ||||||
| Net sales | $ | 426,000 | $ | 262,000 | |||
| Income before interest and taxes | 118,000 | 77,000 | |||||
| Net income after taxes | 55,960 | 63,100 | |||||
| Interest expense | 8,950 | 7,900 | |||||
| Stockholders equity, December 31 (Year 1: $192,000) | 313,000 | 240,000 | |||||
| Common stock, December 31 | 195,000 | 175,000 | |||||
The average number of shares outstanding was 7,800 for Year 3 and 7,000 for Year 2. Required Compute the following ratios for Baird 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 answers to 2 decimal places.) c. Price-earnings ratio (market prices: Year 3, $69 per share; Year 2, $77 per share).(Round your intermediate and final answers to 2 decimal places.) d. Return on average equity. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45)) e. Net margin.
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