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In: Accounting

Otis Company’s income statement information follows: 2018 2017 Net sales $ 480,000 $ 320,000 Income before...

Otis Company’s income statement information follows:

2018 2017
Net sales $ 480,000 $ 320,000
Income before interest and taxes 120,000 98,000
Net income after taxes 81,000 72,000
Interest expense 9,000 8,000
Stockholders’ equity, December 31 (2016: $200,000) 300,000 240,000
Common stock, December 31 240,000 200,000

The average number of shares outstanding was 9,600 for 2018 and 8,000 for 2017.

Required

Compute the following ratios for Otis for 2018 and 2017.

Number of times interest was earned. (Round your answers to 2 decimal places.)

Earnings per share based on the average number of shares outstanding. (Round your answers to 2 decimal places.)

Price-earnings ratio (market prices: 2018, $64 per share; 2017, $78 per share). (Round intermediate calculations and final answers to 2 decimal places.)

Return on average equity. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)

Net margin. (Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)

Calculate: Interest Earned, Earnings Per Share, Price-earnings Ratio, Return on Equity, Net Margin

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