Question 1 - Prepare in good form an income statement for Virginia Slim Wear. Take your calculations all the way to computing earnings per share.
Sales $1,360,000
Shares outstanding 104,000
Cost of goods sold 700,000
Interest expense 34,000
Selling and administrative expense 49,000
Depreciation expense 23,000
Preferred stock dividends 86,000
Taxes 100,000
Question 2 - The Holtzman Corporation has assets of $400,000, current liabilities of $50,000, and long-term liabilities of $100,000. There is $40,000 in preferred stock outstanding; 20,000 shares of common stock have been issued.
a. Compute book value (net worth) per share.
b. If there is $22,000 in earnings available to common stockholders and Holtzman's stock has a P/E of 18 times earnings per share, what is the current price of the stock?
c. What is the ratio of market value per share to book value per share?