Compute the earnings per share ratio

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Reference no: EM131581420

Problem - The income statement for XYZ for the year ended December 31, 2016, appears below.

Sales

$900,000

Cost of goods sold

600,000

Gross margin

300,000

Expenses

160,000*

Net income

$ 140,000

*Includes $40,000 of interest expense and $30,000 of income tax expense.

Additional information:

1. Common stock outstanding during 206 totaled 60,000 shares.

2. The market price of Ray's stock was $20 at the end of 2016.

3. Cash dividends of $20,000 were paid, $5,000 of which were paid to preferred stockholders.

Required: Compute the following ratios for 2016:

A. earnings per share.

B. price-earnings.

C. times-interest-earned ratio.

Reference no: EM131581420

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