Exercise 13-10 Financial Ratios for Assessing Market Performance [LO13-6]

The financial statements for Castile Products, Inc., are given below:

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash				$	19,000
Accounts receivable, net					200,000
Merchandise inventory					380,000
Prepaid expenses					7,000
Total current assets					606,000
Property and equipment, net					870,000
Total assets				$	1,476,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	290,000
Bonds payable, 8%					350,000
Total liabilities					640,000
Stockholders equity:
Common stock, $5 par value				$	190,000
Retained earnings					646,000
Total stockholders equity					836,000
Total liabilities and equity				$	1,476,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,220,000
Cost of goods sold		1,220,000
Gross margin		1,000,000
Selling and administrative expenses		640,000
Net operating income		360,000
Interest expense		28,000
Net income before taxes		332,000
Income taxes (30%)		99,600
Net income	$	232,400

Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $330,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $3.75 per share during the year. Also assume that the companys common stock had a market price of $69 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

equired:

Compute financial ratios as follows:

1.	Earnings per share. (Round your answer to 2 decimal places.)

2.	Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

3.	Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

4.	Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)

5.	Book value per share. (Round your answer to 2 decimal places.)