eBook

Question Content Area

Ratio Analysis

Consider the following information taken from the stockholders' equity section:

$($dollar amount in thousands$)$

$20242023$

Preferred stock $$1,000$ $$1,000$

Common stock, $334,328,193$ and

$330,961,869$ shares issued in $2024$

and $2023,$ respectively $3,3433,310$

Additional paid$-$in capital $-$ common stock $766,382596,239$

Retained earnings $5,460,6294,630,390$

Accumulated other comprehensive

$($loss$)$ income $(206,662)58,653$

Treasury stock $(76,275,837$ and

$56,960,213$ shares in $2024$ and

$2023,$ respectively$)$ at cost $(3,267,955)(2,205,987)$

Total stockholders' equity $$2,756,737$ $$3,083,605$

Additional Information $($all numbers in thousands

other than per$-$share information$)$:

$2024$

Weighted average common shares outstanding $264,453$

Price per share at year end $$70\mathrm{.}47$

Net income $$1,123,153$

Preferred dividends $$80,000$

Common dividends $$212,914$

Common dividends per share $$0\mathrm{.}74$

Stock repurchases $$1,061,968$

Required:

$1.$ Calculate the following for $2024.$ Round your answers to two decimal places.

Stockholder Payout:

Dividend yield fill in the blank $1$

$1\mathrm{.}05$

$\%$

Dividend payout fill in the blank $2$

$\%$

Total payout fill in the blank $3$

$\%$

Stock repurchase payout fill in the blank $4$

$\%$

Stockholder Profitability:

Return on common equity fill in the blank $5$

$\%$

EPS $fill in the blank $6$

$3\mathrm{.}94$

per share

$2.$ Conceptual Connection: Assume $2023$ ratios were:

Stockholder Payout Stockholder Profitability

Dividend yield: $0\mathrm{.}85\%$ Return on common equity: $34\mathrm{.}26\%$

Dividend payout: $9\mathrm{.}80\%$ EPS: $$3\mathrm{.}51$

Total payout: $70\mathrm{.}00\%$

Stock repurchase payout: $60\mathrm{.}20\%$

and the current year industry averages are:

Stockholder Payout Stockholder Profitability

Dividend yield: $0\mathrm{.}76\%$ Return on common equity: $23\mathrm{.}81\%$

Dividend payout: $12\mathrm{.}35\%$ EPS: $$1\mathrm{.}23$

Total payout: $48\mathrm{.}37\%$

Stock repurchase payout: $36\mathrm{.}02\%$

How do you interpret the company's payout and profitability performance?

In $2024,$

both the stockholder payout and stockholder profitability ratios are

above the industry averages. Overall, this could indicate a

good

investment choice.

Check My Work