Comparative financial statements for Springville Company for the last two years appear below. The market price of each share of Springville's common stock was $25 on December 31, Year 2. During Year 2, dividends of $2,000,000 were paid to preferred shareholders and $10,000,000 to common shareholders.

Springville Company

Balance Sheet

December 31, Year 2 and Year 1

(dollars in thousands)Year 2Year 1Current assets:Cash and marketable securities$6,000$4,800Accounts receivable, net20,00016,800Inventory28,00028,800Total current assets54,00050,400Noncurrent assets:Investments75,00081,600Plant & equipment, net12,00012,000Total assets$141,000$144,000Current liabilities:Accounts payable$7,000$6,000Accrued liabilities1,0001,200Total current liabilities8,0007,200Noncurrent liabilities:Bonds payable24,00024,000Total liabilities32,00031,200Shareholders' equity:Preferred shares, 8%, 1,000,000 shares20,00020,000Common shares, no par, 5,000,000 shares30,00030,000Retained earnings59,00062,800Total shareholders' equity109,000112,800Total liabilities & shareholders' equity$141,000$144,000

Springville Company

Income Statement

For the Year Ended December 31, Year 2

(dollars in thousands)Sales (all on account)$280,000Cost of goods sold200,000Gross margin80,000Operating expenses61,333Net operating income18,667Interest expense5,000Net income before taxes13,667Income taxes (40%)5,467Net income$8,200

Required:

Compute the following for Year 2:

a. Dividend payout ratio.

b. Dividend yield ratio.

c. Price-earnings ratio.

d. Accounts receivable turnover.

e. Inventory turnover.

f. Return on total assets.

g. Return on common shareholders' equity.

h. Was financial leverage positive or negative for the year? Explain.