Franklin Company's income statement information follows: Year 3 $429, 000 $260, e00 116,000 55,160 8,950 297,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Franklin Company's income statement information follows: Year 3 $429, 000 $260, e00 116,000 55,160 8,950 297,000 195,e00 Year 2 Net sales Income before interest and taxes Net incone after taxes Interest expense Stockholders' equity, December 31 (Year 1: $197,000) Conmon stock, December 31 78,000 62,400 7,800 245, 000 175,000 The average number of shares outstanding was 7,800 for Year 3 and 7,000 for Year 2. Required Compute the following ratios for Franklin for Year 3 and Year 2. a. Number of times Interest was earned. (Round your answers to 2 decimal places.) b. Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.) c. Price-earnings ratio (market prices: Year 3, $66 per share: Year 2, $77 per share) (Round your intermediate and final answers to 2 decimal places.) d. Return on average equity. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) e. Net margin. (Round your percentage answers to 2 decimal places. (.e., 0.2345 should be entered as 23.45).) Year 3 times Year 2 Times interest earned Emes Eamings per share Price eamings ratio d. Return on average equity times times eNet margin Franklin Company's income statement information follows: Year 3 $429, 000 $260, e00 116,000 55,160 8,950 297,000 195,e00 Year 2 Net sales Income before interest and taxes Net incone after taxes Interest expense Stockholders' equity, December 31 (Year 1: $197,000) Conmon stock, December 31 78,000 62,400 7,800 245, 000 175,000 The average number of shares outstanding was 7,800 for Year 3 and 7,000 for Year 2. Required Compute the following ratios for Franklin for Year 3 and Year 2. a. Number of times Interest was earned. (Round your answers to 2 decimal places.) b. Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.) c. Price-earnings ratio (market prices: Year 3, $66 per share: Year 2, $77 per share) (Round your intermediate and final answers to 2 decimal places.) d. Return on average equity. (Round your percentage answers to 2 decimal places. (l.e., 0.2345 should be entered as 23.45).) e. Net margin. (Round your percentage answers to 2 decimal places. (.e., 0.2345 should be entered as 23.45).) Year 3 times Year 2 Times interest earned Emes Eamings per share Price eamings ratio d. Return on average equity times times eNet margin
Expert Answer:
Answer rating: 100% (QA)
a Time interest earned Earning before interest and taxes In... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
Students also viewed these accounting questions
-
The ABC Co. earned $10 million before interest and taxes on revenue of $60 million last year. Investment in fixed capital was $12 million, and depreciation was $8 million. Working capital investment...
-
Compute the weighted-average number of shares outstanding for Troy Company, which has a simple capital structure, assuming that the following transactions in common stock occurred during the...
-
The following table shows the average number of viewers aged 18-49 who watch the ABC, CBS, FOX, or NBC networks at 10: 00 p. m. The data were collected by Nielsen during the last week of January 2012...
-
for a manufacturing company product costs include all of the following except direct material overhead costs research and development costs direct labor costs
-
Which of these substantive procedures is not used to obtain evidence about contingencies? a. Scanning expense accounts for credit entries. b. Obtaining a letter from the clients attorney. c. Reading...
-
A rancher has a six-year old pony that weighs about 180 pounds. A pony of this age and size needs about 6.2 Mcal of digestible energy, 260 grams of protein, and 9,700 IU of vitamin A in her daily...
-
What audit procedures are required to verify the (a) existence or occurrence and (b) completeness of cash balances?
-
CodeHead Software Inc. does software development. One important activity in software development is writing software code. The manager of the WordPro Development Team determined that the average...
-
Discuss the factors that favor personal selling rather than advertising. ?
-
A physics professor did daredevil stunts in his spare time. His last stunt was an attempt to jump across a river on a motorcycle (Fig. 3.51). The takeoff ramp was inclined at 53.0", the river was...
-
Formulate to minimize the cost of employees. The youth clothing store works 6 days a week, 12 hours a day. Time blocks 9:00- 13:00 13:00- 17:00 17:00- 21:00 Monday Tuesday Wednesday Thursday 10 10 12...
-
At its January 15 meeting, the board of directors of Omega Consolidated Industries made a decision to build a new manufacturing facility in China and approved funding up to $180 million for...
-
Consider a particle in a 1D half-infinite well. The potential in region III is infinite and is zero in region I. In this case however, the potential is not infinite in region II but has a constant...
-
Perpetual Inventory Using LIFO Beginning inventory, purchases, and sales for Item GY9 are as follows: Mar. 1 Inventory 365 units at $24 8 Sale 305 units 15 27 Purchase 510 units at $26 Sale 325 units...
-
How would you explain Boeing's capital structure (financing policy) changes (see D/E and D/V ratios in "Balance Sheet" section during the time data is available using all the relevant...
-
Al Avocadoand Juan Tammeraare the two main bartenders at Pepe's Saloon in Key West, Florida. Anticipating crowds of students during Spring Break they order twice their usual amount of Crazy Lady...
-
Explain a learning experience that was designed to improve students' ability to read and understand texts. How did a teacher assistant determine with the teacher which strategies would best support...
-
What does non-recourse financing mean?
-
Johnnys Lunches is considering purchasing a new, energy-efficient grill. The grill will cost $40,000 and will be depreciated straight-line over 3 years. It will be sold for scrap metal after 5 years...
-
Look at Figure 23.9, which shows the possible future payoffs in July 2018 from a particular package of investments in Amazon options. This package of investments is called a ?butterfly? by option...
-
Here are rates of return on a broad stock market index and on Treasury bills between 2013 and 2017: a. What was the risk premium on common stock in each year? b. What was the average risk premium? c....
-
T/F: Stable analysis patterns (SAPs) separate the core concepts of the domain from business-specific concepts.
-
T/F: Traditional analysis patterns do not separate the core concepts of the domain from business-specific concepts.
-
T/F: Analysis patterns are conceptual models that can be used to model and share domain knowledge.
Study smarter with the SolutionInn App