The following information applies to Acorn Construction Company (ACC): Net sales Income before interest and taxes Net income Year 2 $ 1,020,000 134,500 52,000 31,500 824,300 764,300 31,000 Interest expense Stockholders' equity, December 31 Common stock Preferred stock dividends Information on the number of shares outstanding is provided below: Average number of shares outstanding Year 1 Average number of shares outstanding Year 2 Year 1 $ 614,000 91,000 45,000 22,000 739,000 714,000 31,000 45,000 40,000 Required: Compute the following ratios for ACC for Year 2 and Year 1: Note: Round your intermediate and final answers to 2 decimal places.
The following information applies to Acorn Construction Company (ACC): Net sales Income before interest and taxes Net income Year 2 $ 1,020,000 134,500 52,000 31,500 824,300 764,300 31,000 Interest expense Stockholders' equity, December 31 Common stock Preferred stock dividends Information on the number of shares outstanding is provided below: Average number of shares outstanding Year 1 Average number of shares outstanding Year 2 Year 1 $ 614,000 91,000 45,000 22,000 739,000 714,000 31,000 45,000 40,000 Required: Compute the following ratios for ACC for Year 2 and Year 1: Note: Round your intermediate and final answers to 2 decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information applies to Acorn Construction Company (ACC):
Net sales
Income before interest and taxes i
Net income
Interest expense
Stockholders' equity, December 31
Common stock
Preferred stock dividends,
Year 2
$ 1,020,000
134,500
52,000
31,500
824,300
764,300
31,000
Information on the number of shares outstanding is provided below:
Average number of shares outstanding Year 1
Average number of shares outstanding Year 2
Year 1
$ 614,000
91,000
45,000
22,000
739,000
714,000
31,000
45,000
40,000
Required:
Compute the following ratios for ACC for Year 2 and Year 1:
Note: Round your intermediate and final answers to 2 decimal places.
a. Number of times interest is earned
b. Earnings per share
c. Price-earnings ratio (Market prices: Year 2 $18.50 per share, Year 1 $16.00 per share)
d. Return on equity
e. Net margin
Year 2
%
%
Year 1
%
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