The balance sheet for Finley Corporation at the end of the current year indicates the following: Profit before income taxes was $ 960,000 and income taxes expense for the current year amounted to $ 288,000. Cash dividends paid on common shares were $ 300,000, and the common shares were selling for $ 45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following:
a) number of times that bond interest was covered.
b) earnings per share.
c) price-earnings ratio.
d) payout ratio on common shares.

Question

The balance sheet for Finley Corporation at the end of the current year indicates the following:  Profit before income taxes was $ 960,000 and income taxes expense for the current year amounted to $ 288,000. Cash dividends paid on common shares were $ 300,000, and the common shares were selling for $ 45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following: 
a) number of times that bond interest was covered.
b) earnings per share.
c) price-earnings ratio.
d) payout ratio on common shares.

Quizplus · Accepted Answer

The Answer of The balance sheet for Finley Corporation at the end of the current year indicates the following:  Profit before income taxes was $ 960,000 and income taxes expense for the current year amounted to $ 288,000. Cash dividends paid on common shares were $ 300,000, and the common shares were selling for $ 45 per share at the end of the year. There were no ownership changes during the year.
Instructions
Determine each of the following: 
a) number of times that bond interest was covered.
b) earnings per share.
c) price-earnings ratio.
d) payout ratio on common shares.

The Balance Sheet for Finley Corporation at the End of the Current