Question - The income statement for Sutherland, Inc., appears below.
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SUTHERLAND, INC. Income Statement For the Year Ended December 31. 2017
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Net sales
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$408,000
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Cost of goods sold
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218,000
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Gross profit
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190,000
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Expenses (including 512,500 interest and $21,500 income taxes)
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84,000
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Net income
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$106,000
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Additional information:
1. The weighted-average common shares outstanding in 2017 were 25,000 shares.
2. The market price of Sutherland, Inc. stock was $10 in 2017.
3. Cash dividends of $30,000 were paid, $6,000 of which were to preferred stockholders.
Compute the following ratios for 2017.
(a) Earnings per share
(b) Price-earnings ratio times
(c) Payout ratio
(d) Times interest earned