Chrome File Edit View History Bookmarks Profiles Tab Window Help M O 9% Sun Apr 17 13:39 Q DE .. . M Were we hel X (1) EPS 7 - V X Course Hero x | Mail - Janice x SF McGraw Hill x Question 7 - X (1) Return or x @ How do you x + C D ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mhe. ( * Update : Watch Snatched (... " LindseyJones Uni.. ORS British Council IEL... S www.choosemypl... & New Tab Chapter 14 Quiz i Saved Help Save & Exit Submit Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a 7 $570,000 long-term loan from Gulfport State Bank, $135,000 of which will be used to bolster the Cash account and $435,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year 3.58 Assets points Current assets: Cash $ 98,000 $ 220,000 Marketable securities 25,000 Accounts receivable, net 568,000 370,000 Inventory 1, 015, 000 665,000 Prepaid expenses 26,000 29,000 Total current assets 1, 707,000 1, 309,000 Plant and equipment, net 1, 686, 200 1, 400, 000 Total assets $ 3,393, 200 $ 2, 709,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 835,000 $ 500, 000 Bonds payable, 12: 600,000 600, 000 Total liabilities 1, 435,000 1, 100,000 Stockholders' equity: Common stock, $20 par 760,000 760,000 Retained earnings 1, 198 , 200 349,000 Total stockholders' equity 1,958, 200 1, 609,000 Total liabilities and stockholders' equity $ 3,393, 200 $ 2, 709, 000 Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ 5,350,000 $ 4, 560,000 Mc Graw Chrome File Edit View History Bookmarks Profiles Tab Window Help M O 9% [ ] Sun Apr 17 13:40 QE .. . M Were we hel X (1) EPS 7 - V X Course Hero x | Mail - Janice x SF McGraw Hill x Question 7 - X (1) Return or x How do you x + C D ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mhe.. ( Update : Watch Snatched (... " LindseyJones Uni.. ORS British Council IEL... S www.choosemypl... & New Tab Chapter 14 Quiz i Saved Help Save & Exit Submit Sabin Electronics Comparative Income Statement and Reconciliation 7 This Year Last Year Sales $ 5,350, 000 $ 4, 560,000 Cost of goods sold 3, 945, 000 3, 520, 000 Gross margin 1, 405,000 1, 040, 000 Selling and administrative expenses 7,000 562,000 Net operating income 738, 000 178, 000 3.58 Interest expense 72, 000 72 , 000 points Net income before taxes 566,000 5,000 Income taxes (308) 199 , 800 121, 800 Net income 466, 200 284, 200 Common dividends 117, 000 96 , 000 Net income retained 349, 200 188, 200 Beginning retained earnings 849, 000 660, 800 Ending retained earnings $ 1, 198, 200 $ 849,000 During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 3/10, n/30. All sales are on account. Assume Paul Sabin has asked you to assess his company's profitability and stock market performance. Required: 1. You decide first to assess the company's stock market performance. For both this year and last year, compute: a. The earnings per share. There has been no change in common stock over the last two years. b. The dividend yield ratio. The company's stock is currently selling for $60 per share; last year it sold for $45 per share. c. The dividend payout ratio. d. The price-earnings ratio. (Assume that the industry norm for the price-earnings ratio is 9) e. The book value per share of common stock. Mc Graw Chrome File Edit View History Bookmarks Profiles Tab Window Help 1 MO 9% [ Sun Apr 17 13:40 Q E ... M Were we hel X (1) EPS 7 - V X Course Hero x | Mail - Janice x SF McGraw Hill x Question 7 - x (1) Return or x @ How do you x + C D ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252FIms.mhe... ( Update : Watch Snatched (... " LindseyJones Uni.. ORS British Council IEL... S www.choosemypl... & New Tab Chapter 14 Quiz i Saved Help Save & Exit Submit Required 1 Required 2 7 You decide first to assess the company's stock market performance. For both this year and last year, compute: a. The earnings per share. There has been no change in common stock over the last two years. (Round your answers to 2 decimal places.) b. The dividend yield ratio. The company's stock is currently selling for $60 per share; last year it sold for $45 per share. (Do 3.58 not round intermediate calculations. Round your percentage answers to 1 decimal place.) points c. The dividend payout ratio. (Do not round intermediate calculations. Round your percentage answers to 1 decimal place.) d. The price-earnings ratio. (Assume that the industry norm for the price-earnings ratio is 9.) (Do not round intermediate calculations. Round your answers to 2 decimal places.) e. The book value per share of common stock. (Round your answers to 2 decimal places.) Show lessA This Year Last Year a. Earnings per share b. Dividend yield ratio % % c. Dividend payout ratio % d. Price-earnings ratio e. Book value per share Mc Graw