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Five Measures of Solvency or Profitability The balance sheet for Garcon Inc. at the end of...

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Accounting

Five Measures of Solvency or Profitability

The balance sheet for Garcon Inc. at the end of the currentfiscal year indicated the following:

Bonds payable, 9%$1,600,000
Preferred $5 stock, $50 par262,000
Common stock, $13 par183,924.00

Income before income tax was $446,400, and income taxes were$66,500 for the current year. Cash dividends paid on common stockduring the current year totaled $47,820. The common stock wasselling for $225 per share at the end of the year.

Determine each of the following. Round answers to one decimalplace, except for dollar amounts which should be rounded to thenearest whole cent. Use the rounded answers for subsequentrequirements, if required.

a. Times interest earned ratiotimes
b. Earnings per share on common stock$
c. Price-earnings ratio
d. Dividends per share of common stock$
e. Dividend yield%

Answer & Explanation Solved by verified expert
4.2 Ratings (589 Votes)
a Interest earned ratio Income before Income Taxes 446400 Add Interest expense 144000 Income before interest taxes 590400 Interest Earned Ratio    See Answer
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