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    nkorb1's Avatar
    nkorb1 Posts: 1, Reputation: 1
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    #1

    Dec 12, 2007, 04:03 PM
    Earnings ratios
    Balance sheets at the end of each of the first two years of operations indicate the following:
    2006 2005
    Total current assets $600,000 $560,000
    Total investments $ 60,000 $ 40,000
    Total property, plant, and equipment 900,000 700,000
    Total current liabilities 150,000 80,000
    Total long-term liabilities 350,000 250,000
    Preferred 9% stock, $10 par 100,000 100,000
    Common stock, $10 par 600,000 600,000
    Paid-in capital in excess of par-
    Common stock 60,000 60,000
    Retained earnings 325,000 210,000

    If net income is $115,000 and interest expense is $30,000 for 2006, what is the rate earned on total assets for 2006 (round percent to one decimal point).

    What is the rate earned on stockholders’ equity for 2006?

    If net income is $115,000 and interest expense is $30,000 for 2006, and the market price is $30, What is the price-earnings ratio on common stock for 2006?
    Zolton's Avatar
    Zolton Posts: 1, Reputation: 0
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    #2

    Nov 19, 2010, 09:14 PM
    The balance sheets at the end of each of the first two years of operations indicate the following:

    2009 2008
    Total current assets $600,000 $560,000
    Total investments 60,000 40,000
    Total property, plant, and equipment 900,000 700,000
    Total current liabilities 150,000 80,000
    Total long-term liabilities. 350,000 250,000
    Preferred 9% stock, $100 par 100,000 100,000
    Common stock, $10 par 600,000 600,000
    Paid-in capital in excess of par—common stock 60,000 60,000
    Retained earnings 325,000 210,000

    If net income is $130,000 and interest expense is $40,000 for 2009, and the market price is $30, what is the price-earnings ratio on common stock (rounded to one decimal place)?

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