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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