Calculator Exercise 12-79 Print Item Debt Management Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,793,543 $1,990,740 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) 2,617 0 Special and nonrecurring items $701,556 $788,698 $712,700 Operating income (63,927) (63,685) (62,398) Interest expense 11,529 7,308 10,080 Other income 0 9,117 Gain on sale of investments $660,302 $745,497 $645,179 Income before income taxes (257,000) (290,000) (254,000) Provision for income taxes $403,302 $455,497 $391,179 Net income Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2019 Dec. 31, 2018 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700 803,707 Other 109,456 101,811 Total current assets $2,220,625 $1,784,130 Property and equipment, net 1,666,588 1,813,948 247,892 248,372 Other assets $3,846,450 $4,135,105 Total assets LIABILITIES AND STOCKHOLDERS EQUITY Current liabilities: $309,092 $250,363 Accounts payable 274,220 347,892 Accrued expenses 15,700 137,466 Other current liabilities 93,489 $720.778 Income taxes $707 444 Total current liabilities FRIL Ierl Total current liabilities $707,444 $720,778 Long-term debt 650,000 541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities 1,578,833 1,693,812 Stockholders' equity: $100,000 $100,000 Preferred stock 89,727 89,727 Common stock 127,776 128,906 Additional paid-in capital-common stock 2,136.794 2,397,112 Retained earnings $2,454,297 $2,715,745 (186,680) (274,452) Less: Treasury stock, at cost $2,267,617 $2,441,293 Total stockholders' equity $3.846.450 $4,135,105 Total liabilities and stockholders' equity Total liabilities and stockholders' equity $4,135,105 $3,846,450 Use the information provided above and below to respond to the following requirements. Year ended December 31, Item 2019 2018 Average number of common shares outstanding (thousands) 362,202 364,398 Preferred dividends (thousands) $24,000 $24,000 Dividends per common share 1.54 0.36 Common dividends (thousands) 130,861.00 561,172.30 Common stock repurchases C Market price per share: 79.10 63.25 High 59.00 63.25 Low 66.36 742 Close At January 1, 2018, total stockholders equity was $2,083,122 and there was no preferred stock 1. Compute the earnings per share, return on common equity, dividend yield ratia and dividend payout ratio (in percentage terms, rounded to teo decimal places eept or be rounded to nearest cent) for 2018 and 2019 Required: h 2018 2019 s A t or Grdn Common dividends (thousands) 130,861.00 561,172.30 Common stock repurchases 0 Market price per share: High 83.25 79.10 Low 63.25 59.00 Close 78.42 66.36 At January 1, 2018, total stockholders' equity was $2,083,122 and there was no preferred stock Required: 1. Compute the earnings per share, return on common equity, dividend yield ratio, and dividend payout ratio (in percentage terms, rounded to two decimal places except for EPS, which should be rounded to nearest cent) for 2018 and 2019. 2019 2018 Earnings per share Return on common equity % 6 Dividend yield ratio % Dividend payout ratio 2. Conceptual Connection: Indicate whether there were significant changes in these ratios between the years ended December 31, 2019, and December 31, 2018. All the ratios decreased Determine whether the stockholder ratios suggest that Steele was a better investment at December 31, 2019, or December 31, 2018 December 31, 2018 Previous Next