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MARIN INC. Income Statement For the Year Ended December 31, 2020

Sales revenue $425,500
Cost of goods sold 240,400
Gross profit 185,100
Expenses (including $12,000 interest and $26,000 income taxes) 75,400
Net income $109,700

Additional information:
1. Common stock outstanding January 1, 2022, was 26,300 shares, and 36,100shares were outstanding at December 31, 2022.
2. The market price of Marin stock was $14 in 2022.
3. Cash dividends of $24,000 were paid, $3,600 of which were to preferred stockholders.

Compute the following measures for 2022:
a. Earnings per share
b. Price-earnings ratio
c. Payout ratio
d. Times interest earned

Respuesta :

anthougo

Answer:

MARIN INC.

a. Earnings per share = $106,100/36,100 = $2.94

b. Price-earnings ratio = $14/$2.94 = 4.76 times

c. Payout ratio = $20,400/$106,100 = 0.19

d. Times interest earned = EBIT/Interest expense

= ($185,100 - $37,400)/$12,000

= $147,700/$12,000

= 12.31 times

Explanation:

A) Data and Calculations:

MARIN INC. Income Statement For the Year Ended December 31, 2020

Sales revenue                       $425,500

Cost of goods sold                  240,400

Gross profit                               185,100

Expenses:

Operating expenses $37,400

Interest                       $12,000

Income taxes            $26,000

Total expenses                         75,400

Net income                           $109,700

Preferred stock dividends         3,600

Available to common stock $106,100

Additional information

1. Outstanding common stock:

January 1, 2022 =       26,300 shares

December 31, 2022 = 36,100 shares

Additional issues =       9,800 shares

2. Market price of stock = $14

3. Cash dividends:

Preferred stock            $3,600

Common stock            20,400

Total dividends paid $24,000

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