Selected data for Cole Company for 2014 and additional information on industry averages follow.

Industry averages
Earnings per share ....... $2.00
Price-earnings ratio ...... 8.00
Return on equity ........ 7.30%

Required
Round computations to two decimal points.
a. Calculate and compare Cole Company€™s ratios with the industry averages.
b. Discuss factors you would consider in deciding whether to invest in thecompany.

Eamings (net income) Preferred stock (16,000 shares at $35 par, 696) Common stock (40,500 shares no par, market value $30.40) Retained eamings 240,000 $ 560,000 684,000 480,000 1,724,000 Less: Treasury stock Preferred (1,000 shares) Common (500 shares) Total stockholders' equity S28,800 12,80041,600 $1,682,400