MARIN INC. Income Statement For the Year Ended December 31, 2019 Sales revenue C
ID: 2518975 • Letter: M
Question
MARIN INC. Income Statement For the Year Ended December 31, 2019 Sales revenue Cost of goods sold Gross profit Expenses (including $11,400 interest and $28,100 income taxes) Net income $426,500 215,400 211,100 83,500 $127,600 Additional information: 1. Common stock outstanding January 1, 2019, was 27,600 shares, and 35,100 shares were outstanding at December 31, 2019 2. The market price of Marin stock was $13 in 2019 3. Cash dividends of $23,600 were paid, $4,100 of which were to preferred stockholders. Compute the following measures for 2019 . (Round all answers to 2 decimal places, e.g. 1.83 or 2.51%) (a) Earnings per share (b) Price-earnings ratio (c) Payout ratio (d) Times interest earned 3.52 3.69 times 15.8% 7.73 timesExplanation / Answer
EPS = Net earnings/ average common stocks
= 127600/ (27600+35100)/2
= 127600/31350
= $4.07
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P/E ratio = Price of stock/EPS
= 13/ 4.07
3.19
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Payout ratio = (dividends paid/net earnings for the period)
= (23600- 4100)/ 127600
= .1528 or 15.28%
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Times interest earned = EBIT/ interest Exp
= 211100/ 11400
= 18.52 times
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