Financial Statement Analysis

The income statement for Sutherland, Inc. appears below.

Additional information:

1. The weighted-average common shares outstanding in 2020 were 30,000 shares.
2. The market price of Sutherland, Inc. stock was $13 in 2020.
3. Cash dividends of $26,000 were paid, $5,000 of which were to preferred stockholders.

Instructions

Compute the following ratios at December 31, 2020.

1. Earning per share
2. Price-earnings ratio.
3. Payout ratio.
4. Times interest earned.

Solution