The income statement for Mary Hatch, Inc., appears below.
MARY HATCH, INC.
Income Statement
For the Year Ended December 31, 2012
Net sales............................$400,000
Cost of goods sold...........................230,000
Gross profit.............................170,000
Expenses (including $16,000 interest and $24,000 income taxes).......105, 000
Net income............................$ 65, 000
Additional information:
1. The weighted-average common shares outstanding in 2012 were 30,000 shares.
2. The market price of Mary Hatch, Inc. stock was $13 in 2012.
3. Cash dividends of $26,000 were paid, $5,000 of which were to preferred stockholders.
Instructions
Compute the following ratios for 2012.
(a) Earnings per share.
(b) Price-earnings.
(c) Payout.
(d) Times interest earned.