Chapter 11
Financial Statement Analysis
580
b) Are the ratios improving or weakening? What could the company do to better control
these ratios?
AP-13B (
6
)
Bluebird Inc. had a net income of $387,400 for the year ended August 31, 2016. The company
does not have any preferred shares and has 125,000 common shares outstanding for the
entire year. During the year, they paid out $60,000 in dividends.
Required
a) Calculate earnings per share.
b) Calculate the dividend payout ratio.
c) Calculate the price earnings ratio assuming the market price is $12 per share.
