Solomon Company's income statement information follows:Net salesIncome before interest and taxesNet income after taxesInterest expenseStockholders' equity, December 31 (Year 1: $197,000)Common stock, December 31The average number of shares outstanding was 7,700 for Year 3 and 7,000 for Year 2.RequiredCompute the following ratios for Solomon for Year 3 and Year 2.a. Number of times interest was earned.Note: Round your answer to 2 decimal places.a. Times interest earnedb. Earnings per sharec. Price-earnings ratiod. Return on average equitye. Net marginYear 3b. Earnings per share based on the average number of shares outstanding.Note: Round your answer to 2 decimal places.c. Price-earnings ratio (market prices: Year 3, $64 per share; Year 2, $73 per share).Note: Round your answer to 2 decimal places.d. Return on average equity.Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45).e. Net margin.Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45).timesYear 3$ 415,000112,00055,3209,150times%%Year 2310,000192,500timesYear 2$ 267,00084,00062,0007,450240,000175,000times%%

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Solomon Company's income statement information follows: Net sales Income before interest and taxes Net income after taxes Interest expense Stockholders' equity, December 31 (Year 1: $197,000) Common stock, December 31 The average number of shares outstanding was 7,700 for Year 3 and 7,000 for Year 2. Required Compute the following ratios for Solomon for Year 3 and Year 2. a. Number of times interest was earned. Note: Round your answer to 2 decimal places. b. Earnings per share based on the average number of shares outstanding. Note: Round your answer to 2 decimal places. c. Price-earnings ratio (market prices: Year 3, $64 per share; Year 2, $73 per share). a. Times interest earned b. Earnings per share c. Price-earnings ratio d. Return on average equity e. Net margin Year 3 Year 3 $ 415,000 112,000 55,320 9,150 Note: Round your answer to 2 decimal places. d. Return on average equity. Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45). e. Net margin. Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45). times times % % 310,000 192,500 Year 2 times Year 2 $ 267,000 84,000 62,000 7,450 times % % 240,000 175,000

Solomon Company's income statement information follows: Net sales Income before interest and taxes Net income after taxes Interest expense Stockholders' equity, December 31 (Year 1: $197,000) Common stock, December 31 The average number of shares outstanding was 7,700 for Year 3 and 7,000 for Year 2. Required Compute the following ratios for Solomon for Year 3 and Year 2. a. Number of times interest was earned. Note: Round your answer to 2 decimal places. b. Earnings per share based on the average number of shares outstanding. Note: Round your answer to 2 decimal places. c. Price-earnings ratio (market prices: Year 3, $64 per share; Year 2, $73 per share). a. Times interest earned b. Earnings per share c. Price-earnings ratio d. Return on average equity e. Net margin Year 3 Year 3 $ 415,000 112,000 55,320 9,150 Note: Round your answer to 2 decimal places. d. Return on average equity. Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45). e. Net margin. Note: Round your percentage answer to 2 decimal places (for example, 0.2345 should be entered as 23.45). times times % % 310,000 192,500 Year 2 times Year 2 $ 267,000 84,000 62,000 7,450 times % % 240,000 175,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 39E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...

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