Home / Questions / Five Measures of Solvency or Profitability The balance sheet for Bearing Industries Inc. ...
Five Measures of Solvency or Profitability
The balance sheet for Bearing Industries Inc. at the end of thecurrent fiscal year indicated the following:
|Bonds payable, 7%||$1,700,000|
|Preferred $5 stock, $50 par||87,000|
|Common stock, $11 par||394,762.5|
Income before income tax was $178,500, and income taxes were$26,250, for the current year. Cash dividends paid on common stockduring the current year totaled $43,065. The common stock wasselling for $40 per share at the end of the year.
Determine each of the following. Round answers to one decimalplace, except for dollar amounts which should be rounded to thenearest whole cent. Use the rounded answers for subsequentrequirements, if required.
|a. Times interest earned ratio||times|
|b. Earnings per share on common stock||$|
|c. Price-earnings ratio|
|d. Dividends per share of common stock||$|
|e. Dividend yield||%|
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