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? w.com/ilmytakeAssignment/takeAssignmentMain.dožinwoker-assignments&takeAssign; mentSessionLocator-assignment-take&inprogre; eBook Calculator Print Iten 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, 7% Preferred $5 stock, $100 par Common stock, $15 par $1,400,000 426,000 1,198,125.00 Income before income tax was $401,800, and income taxes were $61,000, for the current year. Cash dividends paid on common stock totaled $115,020. The common stock was selling for $36 per share at the end of the year Determine each of the following. Round answers to one dedimal place, except for dollar amounts which should be rounded to the neare rounded answers for subsequent requirements, if required. a. Times interest earned ratio b. E times c Price-earnings ratio d. Dividends per share of common stock e. Dividend yield Check My Work 2 more Check My work uses remaning Pre All work saved ASS?STButton: One-touch, treor access to VAIO Co F8 F9 F10 F11 F12 Prt Sc Pse Insert Delete Sys Rq Break

Explanation / Answer

a. Times Interest Earned Ratio

Times Interest Earned Ratio = Earnings Before Interest and Tax / Interest Expense

Times Interest Earned Ratio = ($401800 + $1400000 * 7%) / $1400000 * 7%

Times Interest Earned Ratio = $499800 / $98000

Times Interest Earned Ratio = 5.10 Times

b. Earnings Per Share

Earnings Per Share = Net Income - Preferred Dividends / No. of Common Stock O/s

Earnings Per Share = $401800 - $61000 - $21300 / 79875

Earnings Per Share = $319500 / 79875

Earnings Per Share = $4.00

c. Price Earnings Ratio

Price Earnings Ratio = Market Price / EPS

Price Earnings Ratio = $36 / $4 = 9 times

d. Dividends per share of Common Stock

Dividends per share of Common Stock = Dividends / No. of Stock O/s

Dividends per share of Common Stock = $115020 / 79875

Dividends per share of Common Stock = $1.44

e. Dividend Yield

Dividend Yield = Dividends Paid / Market Price

Dividend Yield = $1.44 / $36

Dividend Yield = 4.00%

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