FINANCIAL MANAGEMENT

8. Isidro Corporation has provided the following financial data (in thousands of dollars): Year 2 Year 1 Php1, Php1, Total assets........ 520 490 Stockholders' equity: Php20 Php20 Preferred stock, Php100 par value, 5%............ 0 0 Php40 Php40 Common stock, Php2 par value.... 0 0 Php16 Php16 Additional paid-in capital-common stock........ 0 0 Php38 Php32 Retained earnings.. 0 0 Net income for Year 2 was Php110 thousand. Interest expense was Php21 thousand. The tax rate was 30%. Dividends on common stock during Year 2 totaled Php40 thousand. Dividends on preferred stock totaled Php 10 thousand. The market price of common stock at the end of Year 2 was Php9.15 per share. Required: Compute the following for Year 2: a. Earnings per share (of common stock). b. Price-earnings ratio. c. Dividend payout ratio. d. Dividend yield ratio. e. Return on total assets. f. Return on common stockholders' equity.1. Financial statements for Rarick Company appear below: Rarick Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands) Year IT Year 1 Current assets: Cash and marketable securities Php 120 Php 120 Accounts receivable, net 180 150 Inventory. 100 Prepaid expenses 10 20 Total current assets 410 390 Nongurent assets: "Plant & equipment, net 1 830 1,780 Total assets Php2.240 Php2.170 Current liabilities Accounts payable Php 130 Php 150 Accrued liabilities 30 -30 Notes payable, short term 270 270 Total current liabilities 430 470 Noncurrent liabilities Bonds payable 310 300 Total liabilities 740 170 Stockholders' equity Preferred stock. Php 10 par, 10% 100 100 Common stock. Php5 par 140 140 Additional paid-in capital-common stock 250 150 Retained eamings 910 810 Total stockholders' equity 1,500 1.400 Total liabilities & stockholders' equity Php2 240 Php2.170 Rarick Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (all on account) Php2.400 Cost of goods sold 1.680 Gross margin 720 Selling and administrative expense 280 Net operating income. 440 Interest expense 30 Net income before taxes 410 Income taxes (30%%) 123 Net income. Php 287 Required: Compute the following for Year 2: Current ratio. Acid-testratio Average collection period. Inventory tumover Times interest earned Debt-to-equity ratio.2. Carlstone Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets Cash..... Php 30 Php 110 Accounts receivable 210 260 Inventory.... 190 170 Prepaid expenses. 70 70 Total current assets.... 500 610 Plant and equipment, net.. 810 740 Total assets... Php1,310 Php1 350 Liabilities and Stockholders Equity Current liabilities: Accounts payable....... Php 140 Php 150 Accrued liabilities.... 30 30 Notes payable, short term. 40 40 Total current liabilities ... 210 220 Bonds payable... 190 240 Total liabilities... 400 460 Stockholders equity: Preferred stock, Php100 par value, 5%...... 100 100 Common stock, Php2 par value..... 400 400 Additional paid-in capital-common stock.. 130 130 Retained earnings .. 280 260 Total stockholders equity ..... 910 890 Total liabilities & stockholders equity.. Php1.310 Php1.350 Income Statement For the Year Ended December 31, Year 2 (m thousands of dollars) Sales (all on account). Php1,260 Cost of goods sold. 770 Gross margin............ 490 Selling and administrative expense.. 400 Net operating mcome. 90 Interest expense ....... 26 Net income before taxes .. 64 Income taxes (30%%)... 19 Net income........ Php 45 Required: Compute the following for Year 2: Working capital Current ratio Acid-test ratio. Accounts receivable turnover. Average collection period. Inventory turnover. Average sale period.L 3. Financial statements for Pratt Company appear below. Pratt Company Statement of Financial Position December 31, Year 2 and Year ] (dollars in thousands) Year 2 Year 1 Current assets: Cash and marketable securities. Php 140 Php 140 Accounts receivable, net 190 180 Inventory. 150 150 Prepaid expenses. 70 Total current asset 550 540 Noncurrent assets Plant & equipment, net 1.490 1,420 Total assets. Php2.040 Php 1960 Current liabilities: Accounts payable Php 160 Php 160 Accrued liabilities 50 60 Notes payable, short term 230 440 230 Total current liabilities Noncurrent liabilities: Bonds payable 300 30 0 Total liabilities 740 770 Stockholders equity Preferred stock, Php5 par, 10% 120 120 Common stock, Php5 par 180 180 Additional paid-in capital-common stock 210 210 Retained eamings 790 680 Total stockholders * equity. 1.300 1,190 Total liabilities & stockholders' equity Php 2040 Php 1960 Pratt Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (all on account) Php 2.000 Cost of goods sold *1 400 Gross margin 600 Selling and administrative expense. 240 Net operating income 360 Interest expense. 30 Net income before taxes 330 Income taxes (30%%). Net income Php 231 Dividends during Year 2 totaled Php 121 thousand, of which Php 12 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was Php80. Required: Compute the following for Year 2: Eamings per share of common stock. Price-earnings ratio. Dividend payout ratio. Dividend yield ratio. e. Retum on total assets Retum on common stockholders equity. Book value per share h. Working capital Current ratio. j- Acid-test ratio. Accounts receivable tumover 1 Average collection period Inventory tumover PE Average sale period Times interest earned Debt-to-equity ratio.4. Espinola Corporation's most recent balance sheet and income statement appear below. Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year I Amets Current assets Cash Php 320 Php 180 Accounts receivable 220 240 Inventory 140 130 Prepaid expenses. 20 20 Total current assets. 700 370 Plant and equipment, net 860 920 Total assets Php 1.560 Php 1.490 Liabilities and Stockholders Equity Current liabilities: Accounts payable Php 200 Php 170 Accrued liabilities. 80 80 Notes payable, short term 40 40 Total current liabilities 320 290 Bonds payable 210 220 7 Totalliabilities Stockholders' equity. Preferred stock, Php 100 par value, 5%% 10 0 100 Common stock, Php 1 par value 100 Additional paid-in capital-common stock 150 150 Retained earnings 680 630 Total stockholders ' equity 1,030 980 Total liabilities & stockholders' equity Php 1.5 60 Php 1.490 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) Php 1 220 Cost of goods sold 790 Gross margin. 430 Selling and administrative expense. 268 Netoperating income 162 Interest expense 26 Net income before taxes 136 Income taxes (309:) 41 Netincome. Php 95 Dividends on common stock during Year 2 totaled Php40 thousand Dividends on preferred stock totaled Php5 thousand The market price of common stock at the end of Year 2 was Plip 12 87 per share. Required: Compute the following for Year 2: Gross margin percentag Eamings per share (of common stock) Price-eamings ratio Dividend payout ratio Dividend yield ratio. Retum on total assets Return on common stockholders equity. Book value per share i Working capital Current ratio. Acid-test ratio Accounts receivable tumover. Average collection period Inventory tumover. Average sale period Times interest earned Debt-to-equity ratio.5. Siam Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash. ......; Php 100 Php 140 Accounts receivable. 160 180 Inventory...........: 210 190 Prepaid expenses.... 30 Total current assets.. 510 560 Plant and equipment, net... 860 820 Total assets...... Phpl.370 Php 1.380 Liabilities and Stockholders' Equity Current liabilities: Accounts payable.... Php 160 Php. 180 Accrued liabilities..... 80 80 Notes payable, short term..... 80 80 Total current liabilities.. 320 340 Bonds payable.......... -70 TOO Total liabilities.......... 390 440 Stockholders' equity: Preferred stock, Php100 par value, 10%%......... 200 200 Common stock, Phpl par value..............:: 200 200 Additional paid-in capital-common stock... 130 130 Retained earnings............... 430 410 Total stockholders equity..........:: 980 940 Total liabilities & stockholders equity.......... Php1 370 Php 1,380 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account)......... Php1. 350 Cost of goods sold.... 820 Gross margin............................; 530 Selling and administrative 399 131 Net operating income..... Interest expense..........::. 17 Net income before taxes. 114" Income taxes (307%).. 34 Net income....... Php 80 Dividends on common stock during Year 2 totaled Php20 thousand. Dividends on preferred stock totaled Php20 thousand. The market price of common stock at the end of Year 2 was Php2.$8 per share. Required Compute the following for Year 2: Gross margin percentage. Eamings pershare ( of common stock) Price-earnings ratio. Dividend payout ratio. Dividend yield ratio Ketum ontotal assets Ketum oncommon stockholders equity. Book value pershareL 6. Financial statements for Qadri Company appear below. Qadri Company Statement of Financial Position December 31, Year 2 and Year 1 (dollars in thousands) Year 2 Year I Current assets: Cash and marketable securities..... Php 120 Php. 100 Accounts receivable, net... 130 120 Inventory............ 160 180 Prepaid expenses.... 50 30 Total current assets.. 460 450 Noncurrent assets: Plant & equipment, net... 1,730 1,730 Total assets....... Php2. 190 Php 2. 180 Current liabilities: Accounts payable........... Php. 50 | Php 100 Accrued liabilities.......... 60 50 Notes payable, short term... 160 200 Total current liabilities. 270 350 Noncurrent liabilities: Bonds payable.... 280 300 Total liabilities......... 350 650 Stockholders equity. Preferred stock, Php10 par, )70.....": 120 120 Common stock, Php10 par........... 720 220 Additional paid-in capital-common stock....... T10 110 Retained earnings............. 1.190 1,080 Total stockholders' equity.......: 1.640 1.530 Total liabilities & stockholders equity............ Php2. 190 Phip 2. 180 Qadri Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) Sales (all on account)........ Php2,300 Cost of goods sold... 1.610 690 Selling and administrative expense.. 270 Net operating income.. 420 Interest expense............... 30 Net income before taxes..... 390 Income taxes (30%)... T17 Net income....... Php 273 Dividends during Year 2 totaled Php163 thousand, of which Php6 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was Php150 Required: Compute the following for Year 2 Earnings pershare of common stock. Price-earnings ratio. Dividend yield ratio Return ontotal assets. Ketum on common stockholders equity. Book value pershare.L 7. Maranville Corporation's most recent balance sheet and income statement appear below. Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Php 17 Php 18 Cash............ 0 0 Accounts receivable 160 180 Inventory.......... 170 160 Prepaid expenses...... 70 60 Total current assets.......... 570 580 Plant and equipment, net.. 840 830 Php1.41 Phpl.41 Total assets......... Liabilities and Stockholders Equity Current liabilities : Php 15 Php 16 Accounts payable.............. 0 Accrued liabilities..... 40 40 Notes payable, short term. 50 50 Total current liabilities... 240 250 Bonds payable.... 90 Total liabilities........... 330 350 Stockholders' equity: Preferred stock, Php100 par value, 10%. 200 200 Common stock, Php? par value........... 400 400 Additional paid-in capital-common stock.. 140 140 Retained eamings......... 340 320 Total stockholders' equity....... 1.080 1.060 Php1.41 Phpl.41 Total liabilities & stockholders' equity.............. Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Phpl, 41 Sales (all on account)... 0 Cost of goods sold... 860 Gross margin......... 550 Selling and administrativ 449 Net operating income. 101 Interest expense............ 15 Net income before taxes... 86 Income taxes (30%%)..... 26 Net income....... Php 60 Dividends on common stock during Year 2 totaled Php20 thousand. Dividends on preferred stock totaled Php20 thousand. The market price of common stock at the end of Year 2 was Php2.36 per share. Required: Compute the following for Year 2: 2. Eamings per share ( of common stock). b. Price-earnings ratio. C. Dividend payout ratio. Dividend yield ratio. Return on total assets. Return on common stockholders equity. E. Book value per share.8. Isidro Corporation has provided the following financial data (in thousands of dollars): Year 2 Year 1 Php1, Php1, Total assets.... 520 490 Stockholders' equity: Php20 Php20 Preferred stock, Php100 par value, 5%. 0 0 Php40 Php40 Common stock, Php2 par value. 0 Php16 Php16 Additional paid-in capital-common stock. 0 Php38 |Php32 Retained earnings.. Net income for Year 2 was Php1 10 thousand. Interest expense was Php21 thousand. The tax rate was 30%. Dividends on common stock during Year 2 totaled Php40 thousand Dividends on preferred stock totaled Php10 thousand. The market price of common stock at the end of Year 2 was Php9.15 per share. Required: Compute the following for Year 2: a. Earnings per share (of common stock). b. Price-earnings ratio. c. Dividend payout ratio. Dividend yield ratio. e. Return on total assets. f. Return on common stockholders' equity. g. Book value per share