Question
Account balances at the beginning of the year were: accounts receivable, $190,000; and inventory, $330,000. All sales were on account. Assume that Castile Products, Inc.,
Account balances at the beginning of the year were: accounts receivable, $190,000; and inventory, $330,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.65 per share during the year. Also assume that the companys common stock had a market price of $61 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.
The financial statements for Castile Products, Inc., are given below: |
Castile Products, Inc. Balance Sheet December 31 | ||||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 20,000 | ||||
Accounts receivable, net | 210,000 | |||||
Merchandise inventory | 390,000 | |||||
Prepaid expenses | 10,000 | |||||
Total current assets | 630,000 | |||||
Property and equipment, net | 850,000 | |||||
Total assets | $ | 1,480,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Liabilities: | ||||||
Current liabilities | $ | 290,000 | ||||
Bonds payable, 11% | 400,000 | |||||
Total liabilities | 690,000 | |||||
Stockholders equity: | ||||||
Common stock, $10 par value | $ | 110,000 | ||||
Retained earnings | 680,000 | |||||
Total stockholders equity | 790,000 | |||||
Total liabilities and equity | $ | 1,480,000 | ||||
Castile Products, Inc. Income Statement For the Year Ended December 31 | |||
Sales | $ | 2,200,000 | |
Cost of goods sold | 1,250,000 | ||
Gross margin | 950,000 | ||
Selling and administrative expenses | 620,000 | ||
Net operating income | 330,000 | ||
Interest expense | 44,000 | ||
Net income before taxes | 286,000 | ||
Income taxes (30%) | 85,800 | ||
Net income | $ | 200,200 | |
1.
Earnings per share. (Round your answer to 2 decimal places.) |
2. | Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) |
3. | Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) |
4. | Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) |
5. | Book value per share. |
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