Exercise 16-10 (Algo) Financial Ratios for Assessing Market Performance [LO16-6]

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

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash	$	22,000
Accounts receivable, net		260,000
Merchandise inventory		310,000
Prepaid expenses		8,000
Total current assets		600,000
Property and equipment, net		890,000
Total assets	$	1,490,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities	$	250,000
Bonds payable, 11%		330,000
Total liabilities		580,000
Stockholders equity:
Common stock, $10 per value	$	190,000
Retained earnings		720,000
Total stockholders equity		910,000
Total liabilities and stockholders equity	$	1,490,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,200,000
Cost of goods sold		1,220,000
Gross margin		980,000
Selling and administrative expenses		650,000
Net operating income		330,000
Interest expense		36,300
Net income before taxes		293,700
Income taxes (30%)		88,110
Net income	$	205,590

Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $320,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $2.75 per share during the year. Also assume that the companys common stock had a market price of $62 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:

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 percentage final answer to 2 decimal places.)

3. Dividend yield ratio. (Round your percentage answer to 2 decimal places.)

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

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