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