Here is the income statement for Bachus, Inc. BACHUS, INC. Income Statement For the Year Ended December

Question:

Here is the income statement for Bachus, Inc.

BACHUS, INC.

Income Statement

For the Year Ended December 31, 2012

Sales .............................$400,000

Cost of goods sold ........................230,000

Gross profit .............................170,000

Expenses (including $16,000 interest and $24,000 income taxes) .......98,000

Net income .............................$ 72,000

Additional information:

1. Common stock outstanding January 1, 2012, was 32,000 shares, and 40,000 shares were outstanding at December 31, 2012.

2. The market price of Bachus, Inc., stock was $14 in 2012.

3. Cash dividends of $21,000 were paid, $5,000 of which were to preferred stockholders.

Instructions

Compute the following measures for 2012.

(a) Earnings per share.

(b) Price-earnings ratio.

(d) Times interest earned ratio.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...