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Balance Sheet - EPS, price-earnings, payout HELP!?

Net sales (all on account) $600,000 $520,000

Expenses

Cost of goods sold 415,000 354,000

Selling and administrative 120,800 114,800

Interest expense 7,800 6,000

Income tax expense 18,000 14,000

Total expenses 561,600 488,800

Net income $ 38,400 $ 31,200

DILLON COMPANY

Balance Sheets

December 31

Assets 2011 2010

Current assets

Cash $ 21,000 $ 18,000

Short-term investments 18,000 15,000

Accounts receivable (net) 86,000 74,000

Inventory 90,000 70,000

Total current assets 215,000 177,000

Plant assets (net) 423,000 383,000

Total assets $638,000 $560,000

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $122,000 $110,000

Income taxes payable 23,000 20,000

Total current liabilities 145,000 130,000

Long-term liabilities

Bonds payable 120,000 80,000

Total liabilities 265,000 210,000

Stockholders' equity

Common stock ($5 par) 150,000 150,000

Retained earnings 223,000 200,000

Total stockholders' equity 373,000 350,000

Total liabilities and stockholders' equity $638,000 $560,000

Additional data:

The common stock recently sold at $19.50 per share.

The year-end balance in the allowance for doubtful accounts was $3,000 for 2011 and $2,400 for 2010.

(h) Return on common stockholders' equity 10.6 %

(i) Earnings per share $ 1.28

(j) Price-earnings 15.2 times

(k) Payout 40.1 %

(m) Times interest earned 8.2 times

okay i'm so confused. this is the answer to my homework but these are the ones I dont know how to do. Can someone please explain it by showing an equation!? I tried several but i just cant get the correct answer.

1 Answer

Relevance
  • JKRB
    Lv 7
    1 decade ago
    Favorite Answer

    Return on Equity = Net Income/Shareholder's Equity

    EPS = Net income / Outstanding shares

    P/E Ratio = Market value per share / EPS

    Payout ratio = Dividends per share / Earnings per share (Since dividends aren't shown, payout may mean something else here.

    Times interest earned = EBIT / Interest expense

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