Question: Question #13 : Instructions: Compute the following ratios for 2017: a) Earnings per share, b) Price-earnings ratio, c) Payout ratio, d) Times interest earned. Income

Question #13:

Instructions: Compute the following ratios for 2017: a) Earnings per share, b) Price-earnings ratio, c) Payout ratio, d) Times interest earned. Income statement for Christiansen, AJS, appears below.

CHRISTIANSEN, AJS Income Statement For the Year Ended December 31, 2017
Net sales ..		400,000
Cost of goods sold .		235,000
Gross profit		165,000
Expenses (including 14,000 interest and 17,000 income taxes) .		105,000
Net income .		60,000

Additional information:

The weighted-average ordinary shares outstanding in 2017 were 32,000 shares.

The market price of Christiansen, AJS was 10.80 per share in 2017.

Cash dividends of 20,000 were paid, 5.000 of which were to preference shareholders.

Instructions: Compute the following ratios for 2017: a) Earnings per share, b) Price-earnings ratio, c) Payout ratio,

d) Times interest earned.

RATIOS:

a) Earnings per share. Show your computations

b) Price-earnings ratio. Show your computations

c) Payout ratio. Show your computations

d) Times interest earned. Show your computations

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