Question - The income statement for Christensen, Inc., appears below.
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CHRISTENSEN, INC. Income Statement For the Year Ended December 31, 2011
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Sales
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$400,000
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Cost of goods sold
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230,000
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Gross profit
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170,000
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Expenses (including $16,000 interest and $24,000 income taxes)
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105,000
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Net income
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$65,000
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Additional information:
1. The weighted-average common shares outstanding in 2011 were 30,000 shares.
2. The market price of Christensen, Inc. stock was $13 in 2011.
3. Cash dividends of $26,000 were paid, $5,000 of which were to preferred stockholders.
Instructions - Compute the following ratios for 2011.
(a) Earnings per share.
(b) Price-earnings.
(c) Payout.
(d) Times interest earned.