The Following Information Relates to the SPE Company in 2014

question 104

Multiple Choice

The following information relates to the SPE company in 2014. Net income: $50,000
Common shares outstanding on January 1: 30,000
On June 30 issued 2,000 8% cumulative convertible preferred shares
$100 par,each convertible into 10 common shares
Issued a 40% stock dividend on Sept.30
What is the diluted EPS? (Rounded to the nearest cent)

• A) $1.00
• B) $0.89
• C) $0.81
• D) $0.76

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Definitions:

Receivables Turnover

This is a financial ratio that measures how efficiently a company collects debts from its customers, indicating how many times receivables are converted into cash in a period.

Interval Measure

The interval measure is a liquidity metric that estimates how long a company can operate using its current liquid assets without needing additional financing.

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as (current assets - inventories) / current liabilities.

Inventory

The goods and materials a business holds for the ultimate goal of resale or processing.