Question

The income statement for Pointe Company for the year ended December 31, 2017 appears below.

*Includes $20,000 of interest expense and $25,000 of income tax expense.

Additional information:

Compute the following ratios for 2017: (Round answers to 2 decimal places, e.g. 2.25.)

a) Earnings per share $

b) Price Earnings times

c) Times interest earned times

Sales

 

$720,000

 

Cost of goods sold

 

380,000

 

Gross profit

 

340,000

 

Expenses

 

190,000

*

Net income

 

$150,000