Compute the earnings per share and price-earnings

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

CHRISTENSEN, INC. Income Statement For the Year Ended December 31, 2011

Sales

$399,400

Cost of goods sold

227,600

Gross profit

171,800

Expenses (including $15,000 interest and $22,200 income taxes)

109,500

Net income

$62,300

Additional information:

1. The weighted average common shares outstanding in 2011 were 28,000 shares.

2. The market price of Christensen, Inc. stock was $18 in 2011.

3. Cash dividends of $22,300 were paid, $4,780 of which were to preferred stockholders.

Compute the following ratios for 2011.

(a) Earnings per share.

(b) Price-earnings.

(c) Payout.

(d) Times interest earned.

Reference no: EM131804835

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