Exercise 12-82 (Algorithmic) Stockholder Ratios Financial statements for Remington Inc. follow. Remington Inc. Consolidated Statements of Income (In thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 (5,286,253) (4,953,556) (4,355,675) $1,958,835 $1,990,740 $1,793,543 Cost of goods sold Gross margin General and administrative expenses Special and nonrecurring items Operating income (1,259,896) (1,202,042) (1,080,843) 2,617 $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 9,117 Income before income taxes $645,179 $745,497 Provision for income taxes $660,302 257,000 254,000 290,000 Net Income $391,179 $455,497 $403,302 Net income per share $1.08 $1.25 $1.11 Remington Inc. Consolidated Balance Sheets (In thousands) ASSETS Dec. 31, 2019 Current assets: Dec. 31, 2018 Cash and equivalents $320,558 Accounts receivable $41,235 1,056,911 Inventories 837,377 733,700 Other 803,707 109,456 Total current assets 101,811 $2.220.625 $1.784.130 Check My Mind Remington Inc. Consolidated Balance Sheets (In thousands) Dec. 31, 2019 ASSETS Dec. 31, 2018 Current assets: $320,558 $41,235 Cash and equivalents 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 Other assets 1,813,948 248,372 247,892 Total assets $4,135,105 $3,846,450 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $250,363 $309,092 Accounts payable Accrued expenses Other current liabilities 347,892 274,220 15,700 Income taxes 93,489 137.466 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 $1,693,812 $1,578,833 Stockholders' equity: Preferred stock $100,000 Common stock $100,000 89,727 89,727 Additional paid-in-capital-common stock 128,906 Retained earnings 127,776 2,397,112 2,136,794 $2,715,745 Less: Treasury stock, at cost $2,454,297 (274.452) (186.680 Check My Work LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $250,363 $309,092 Accrued expenses 347,892 274,220 Other current liabilities 15,700 Income taxes 93,489 137,466 $707,444 Total current liabilities Long-term debt $720,778 $650,000 $541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities $1,693,812 $1,578,833 Stockholders' equity: Preferred stock $100,000 $100,000 Common stock 89,727 89,727 Additional paid-in-capital-common stock 128,906 127,776 Retained earnings 2,397,112 2,136,794 $2.715,745 $2,454,297 Less: Treasury stock, at cost (274,452) (186,680) Total stockholders' equity $2,441,293 Total liabilities and stockholders' equity $2,267,617 $3,846,450 $4,135,105 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) Preferred dividends (thousands) Dividends per common share Common Dividends (thousands) Common stock repurchases Market price per share: High 359,942 $24,000 $0.36 364,398 $24,000 $1.54 130,861.00 561,172.30 0 0 Low $83.25 $79.10 Close 63.25 59.00 78.42 66.36 Check My Work Market price per share: High $83.25 $79.10 Low 63.25 59.00 2018 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 Earnings per share 1.01 X 1.16 X Return on common equity 14 X % 18 X % Dividend yield ratio 0.33 X % % 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. Decreased Determine whether the stockholder ratios suggest that Remington was a better investment at December 31, 2019, or December 31, 2018 December 31, 2018 Feedback