Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Comparative financial statements for Lensher Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common

Comparative financial statements for Lensher Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 840,000 shares of common stock were outstanding. The interest rate on the bond payable was 12%, the income tax rate was 40%, and the dividend per share of common stock was $0.75 last year and $0.40 this year. The market value of the companys common stock at the end of the year was $20.00. All of the companys sales are on account.

Lensher Corporation Comparative Balance Sheet (dollars in thousands)
This Year Last Year
Assets
Current assets:
Cash $ 6,344 $ 6,400
Accounts receivable, net 12,700 9,300
Inventory 9,900 8,360
Prepaid expenses 1,840 2,180
Total current assets 30,784 26,240
Property and equipment:
Land 6,400 6,400
Buildings and equipment, net 19,600 19,400
Total property and equipment 26,000 25,800
Total assets $ 56,784 $ 52,040
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 9,900 $ 8,500
Accrued liabilities 680 900
Notes payable, short term 340 340
Total current liabilities 10,920 9,740
Long-term liabilities:
Bonds payable 10,000 10,000
Total liabilities 20,920 19,740
Stockholders' equity:
Common stock 840 840
Additional paid-in capital 4,400 4,400
Total paid-in capital 5,240 5,240
Retained earnings 30,624 27,060
Total stockholders' equity 35,864 32,300
Total liabilities and stockholders' equity $ 56,784 $ 52,040

Lensher Corporation Comparative Income Statement and Reconciliation (dollars in thousands)
This Year Last Year
Sales $ 83,000 $ 78,000
Cost of goods sold 54,000 50,000
Gross margin 29,000 28,000
Selling and administrative expenses:
Selling expenses 8,900 8,400
Administrative expenses 12,400 11,400
Total selling and administrative expenses 21,300 19,800
Net operating income 7,700 8,200
Interest expense 1,200 1,200
Net income before taxes 6,500 7,000
Income taxes 2,600 2,800
Net income 3,900 4,200
Dividends to common stockholders 336 672
Net income added to retained earnings 3,564 3,528
Beginning retained earnings 27,060 23,532
Ending retained earnings $ 30,624 $ 27,060

:

Compute the following financial data for this year:

image text in transcribed

1. Earnings per share 2. Price-earnings ratio 3. Dividend payout ratio 4. Dividend yield ratio 5. Book value per share % %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations of Financial Management

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen

16th edition

978-1259277160

Students also viewed these Accounting questions

Question

Solve the equation belo 3.x 7 2 x+5 x-6 (x The solution is x=

Answered: 1 week ago