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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
- JKRBLv 71 decade agoFavorite 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