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Five Measures of Solvency or Profitability The balance sheet for Garcon Inc. at the end of...

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Accounting

Five Measures of Solvency or Profitability

The balance sheet for Garcon Inc. at the end of the currentfiscal year indicated the following:

Bonds payable, 8%$1,200,000
Preferred $10 stock, $100 par181,000
Common stock, $12 par705,900.00

Income before income tax was $297,600, and income taxes were$44,200 for the current year. Cash dividends paid on common stockduring the current year totaled $42,354. The common stock wasselling for $48 per share at the end of the year.

Determine each of the following. Round answers to one decimalplace, except for dollar amounts which should be rounded to thenearest whole cent. Use the rounded answers for subsequentrequirements, if required.

a. Times interest earned ratiotimes
b. Earnings per share on common stock$
c. Price-earnings ratio
d. Dividends per share of common stock$

Correct

e. Dividend yield%

Answer & Explanation Solved by verified expert
3.8 Ratings (392 Votes)
a Times interest earned ratio Interest Expenses 96000 1200000 x 8 Times interest earned ratio Earnings Before Income Tax Interest Expenses Interest Expenses 297600 96000 96000    See Answer
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