【正文】 terest Expense and Ine Taxes Interest Expense = Times Interest Earned $84,000 $7,300 = = Times Interest Earned P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Profit Margin Gross Margin Return on Total Assets Basic Earnings per Share Book Value per Common Share Return on Common Stockholders’ Equity Profitability P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Use this information to calculate the profitability ratios for Norton Corporation. Profitability N O R T O N C O R PO R A T I O N2022N u m b e r o f c o m m o n s h a re s o u t s t a n d i n g a l l y e a r 2 7 , 4 0 0 N e t i n c o m e 5 3 , 6 9 0$ S h a re h o l d e rs 39。 e q u i t y B e g i n n i n g o f y e a r 1 8 0 , 0 0 0 E n d o f y e a r 2 3 4 , 3 9 0 R e v e n u e s 4 9 4 , 0 0 0 C o s t o f s a l e s 1 4 0 , 0 0 0 T o t a l a s s e t s B e g i n n i n g o f y e a r 3 0 0 , 0 0 0 E n d o f y e a r 3 4 6 , 3 9 0 P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This ratio describes a pany’s ability to earn a ine from sales. Profit Margin Net Ine Net Sales = = % Profit Margin $53,690 $494,000 = Profit Margin P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This ratio measures the amount remaining from $1 in sales that is left to cover operating expenses and a profit after considering cost of sales. Gross Margin Net Sales Cost of Sales Net Sales = = % Gross Margin $494,000 $140,000 $494,000 = Gross Margin P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This ratio is generally considered the best overall measure of a pany’s profitability. = % $53,690 ($300,000 + $346,390) 247。 2 = Return on Total Assets Return on Total Assets Net Ine Average Total Assets = Return on Total Assets P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Return on Common Stockholders’ Equity Net Ine Preferred Dividends Average Common Stockholders’ Equity = = % $53,690 0 ($180,000 + $234,390) 247。 2 = Return on Common Stockholders’ Equity This measure indicates how well the pany employed the owners’ investments to earn ine. Return on Common Stockholders’ Equity P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Book Value per Common Share Shareholders’ Equity Applicable to Common Shares Number of Common Shares Outstanding = This ratio measures liquidation at reported amounts. Book Value per Common Share P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This measure indicates how much ine was earned for each share of mon stock outstanding. Basic Earnings per Share Net Ine Preferred Dividends WeightedAverage Common Shares Outstanding = Basic Earnings per Share $53,690 0 27,400 = = $ per share Basic Earnings per Share P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin PriceEarnings Ratio Dividend Yield Market Prospects P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin N O R T O N C O R P O R A T I O ND e c e m b e r 3 1 , 2 0 0 7E a r ni ngs pe r S ha r e 1 . 9 6$ M a r k e t P r i c e 1 5 . 0 0 A nnua l D i v i de nd pe r S ha r e 2 . 0 0 Use this information to calculate the market ratios for Norton Corporation. Market Prospects P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This measure is often used by investors as a general guideline in gauging stock values. Generally, the higher the priceearnings ratio, the more opportunity a pany has for growth. PriceEarnings Ratio Market Price Per Share Earnings Per Share = PriceEarnings Ratio $ $ = = times PriceEarnings Ratio P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin This ratio identifies the return, in terms of cash dividends, on the current market price of the stock. Dividend Yield Annual Dividends Per Share Market Price Per Share = Dividend Yield $ $ = = % Dividend Yield P 3 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Net Ine Reporting Ine and Equity Discontinued Segments Changes in Accounting Principles Extraordinary Items Continuing Operations A 2 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Revenues, expenses and ine generated by the pany’s continuing operations. Continuing Operations Continuing Operations Net Ine A 2 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin Ine from operating the discontinued segment prior to its disposal and gain or loss on the sale of the assets of the segment. Discontinued Segments Discontinued Segments Net Ine A 2 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin A gain or loss that is unusual in nature and infrequent in occurrence. Extraordinary Items Extraordinary Items Net Ine A 2 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin The increase or decrease in ine when changing from one generally accepted accounting principle to another. Changes in Accounting Principles Changes in Accounting Principles Net Ine A 2 169。 The McGrawHill Companies, Inc., 2022 McGrawHill/Irwin I nc om e f r om c on t i nu i ng op e r a t i on s 1 , 3 8 9 , 5 0 0$ D i s c on t i nu e d op e r a t i on s :I nc om e f r om op e r a t i ng R a di o D i v i s i on ( ne t of $ 1 0 5 , 0 0 0 i nc om e t a x e s ) 4 2 0 , 0 0 0$ Lo s s on di s po s a l of R a di o D i v i s i on ( ne t of $ 3 8 , 5 0 0 t a x be ne f i t ) ( 1 5 4 , 0 0 0 ) 2 6 6 , 0 0 0 E x t r a ordi na r y i t e m :Lo s s f r