Exercise 14-9

The income statement for Sutherland, Inc., appears below.

SUTHERLAND, INC.

Income Statement

For the Year Ended December 31, 2017

Net sales $434,000

Cost of goods sold 190,000

Gross profit 244,000

Expenses (including $13,500 interest and $20,000 income taxes) 84,000

Net income $ 160,000

Additional information:

1. The weighted-average common shares outstanding in 2017 were 35,000 shares.

2. The market price of Sutherland, Inc. stock was $14 in 2017.

3. Cash dividends of $23,000 were paid, $6,900 of which were to preferred stockholders.

Compute the following ratios for 2017. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8% .)

Earnings per share $__________

Price-earnings ratio __________ times

Payout ratio __________%

Times interest earned __________ times