Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The income statement for Christensen, Inc., appears below. CHRISTENSEN, INC. Income Statement For the Year Ended December 31, 2011 Sales $400,000 Cost of goods sold

The income statement for Christensen, Inc., appears below.

CHRISTENSEN, INC.
Income Statement

For the Year Ended December 31, 2011

Sales $400,000
Cost of goods sold

231,400

Gross profit 168,600
Expenses (including $15,000 interest and $25,250 income taxes)

105,100

Net income

$63,500

Additional information:

  1. The weighted average common shares outstanding in 2011 were 25,000 shares.

  2. The market price of Christensen, Inc. stock was $16 in 2011.

  3. Cash dividends of $25,700 were paid, $4,900 of which were to preferred stockholders.

Compute the following ratios for 2011.

(a) Earnings per share. (Round answer to 2 decimal places, e.g. 10.50 and use the rounded the amount for future calculations.) (b) Price-earnings. (Round answer to 1 decimal place, e.g. 10.5.) (c) Payout. (Round answer to 0 decimal places, e.g. 25%.) (d) Times interest earned. (Round answer to 1 decimal place, e.g. 10.5.)

(a) Earnings per share $
(b) Price-earnings times
(c) Payout %
(d) Times interest earned times

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Eoc Only Davis Managerial Accounting

Authors: Charles E. Davis, Elizabeth Davis

2nd Edition

111883464X, 978-1118834640

More Books

Students also viewed these Accounting questions

Question

Is conflict always unhealthy? Why or why not? (Objective 4)

Answered: 1 week ago