The Following Information Was Provided by Joseph Company as of December

question 102

Essay

The following information was provided by Joseph Company as of December 31,Year 2: $\begin{array}{|l|r|}\hline \text { Net income } & \$ 528,000 \\\hline \text { Preferred stock, (20,000 shares at } \$ 10 \text { par, } 4 \%) & \$ 200,000 \\\hline \text { Common stock, (220,000 shares at } \$ 1 \text { par) } & \$ 220,000 \\\hline \text { Paid-in capital in excess of par-common } & \$ 2,475,500 \\\hline \text { Retained earnings } & \$ 3,824,500 \\\hline\\\hline\end{array}$ On the most recent trading date,Joseph's common shares sold at $36 and the preferred shares sold at $14.
The following information on industry averages is provided:
Earnings per share $2.06
Price-earnings ratio 13.2:1
Required:
1)Calculate and compare Joseph Company's ratios with the industry averages shown above.Round your answer to two decimal places.
2)Discuss whether you would invest in this company.

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Definitions:

Union Representation

The process by which a union serves as the intermediary in negotiations between its members and their employer, defending the interests of the workforce.

Employee Empowerment

A management philosophy focused on giving employees the tools, resources, and autonomy to take initiative and make decisions in their roles.

Employment Relationship

The legal link between employers and employees that arises when a person performs work or services under certain conditions in return for remuneration.

Bilateral Negotiations

Negotiation between two parties, often used in the context of labor discussions where an employer and a labor union negotiate terms.