Here is the income statement for Eberle, Inc. EBERLE, INC. Income Statement For
ID: 2589202 • Letter: H
Question
Here is the income statement for Eberle, Inc.
EBERLE, INC.
Income Statement
For the Year Ended December 31, 2014
$431,400
252,300
179,100
83,900
$ 95,200
Additional information:
Compute the following measures for 2014. (Round all answers to 2 decimal places, e.g. 1.83 or 2.51%)
EBERLE, INC.
Income Statement
For the Year Ended December 31, 2014
$431,400
Cost of goods sold252,300
Gross profit179,100
Expenses (including $11,100 interest and $23,100 income taxes)83,900
Net income$ 95,200
Explanation / Answer
(a) Earnings per share
(Net Income - Preferred stock dividends) / Average common shares outstanding
($95,200 - 4,600) / (29,500 + 36,900) / 2 = $2.73
(b) Price-earnings ratio = MPS/EPS
= $12 / 2.73 = 4.40 times
(c) Payout ratio
($24,800 - 4,600) / 95,200 = 21.22%
(d) Times interest earned ratio
Earnings before Interest and Tax / Interest expenses
($95,200 + $11,100 + $23,100) / $11,100 = 11.66 times