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					250,000
Merchandise inventory					370,000
Prepaid expenses					10,000
Total current assets					649,000
Property and equipment, net					810,000
Total assets				$	1,459,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	260,000
Bonds payable, 8%					330,000
Total liabilities					590,000
Stockholders equity:
Common stock, $10 par value				$	170,000
Retained earnings					699,000
Total stockholders equity					869,000
Total liabilities and equity				$	1,459,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,210,000
Cost of goods sold		1,160,000
Gross margin		1,050,000
Selling and administrative expenses		660,000
Net operating income		390,000
Interest expense		26,400
Net income before taxes		363,600
Income taxes (30%)		109,080
Net income	$	254,520

Account balances at the beginning of the year were: accounts receivable, $140,000; and inventory, $280,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $2.95 per share during the year. Also assume that the companys common stock had a market price of $54 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

Required:

Compute financial ratios as follows:

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.)