Hello,

I just wanted to make sure my answers were correct:

Thanks!

My answers:

Current Ratio 3.43

Current Assets Current Liabilities $1,045,000 $305,000

Quick Ratio 3.11

Cash + Short Term Investments+Accts. Receivables / Current Liabilites $610,000 + $340,000 / $305,000

Debt to Total Assets Ratio 0.49

Total Debt (Liabilities) / Total Assets $1,305,000 / 2,683,000

Debt to Total Equity Ratio 0.95

Total Debt (liabilities) / Total equity $1,305,000 / $1,378,000

Times Interest Earned Ratio 4.23

Income before interest expense and income taxes / interest expense $210,000 + $65,000/ $65,000

Inventory Turnover Ratio 9.33

cost of goods sold / average inventory $980,000/(($95,000+$115,000)/2)

Net Profit on Sales 9.74%

net income / net sales $170,000 / $1,745,000

Gross Profit Margin 44.00%

gross profit / net sales $765,000 / $1,745,000

Return on Assets 6.65%

net income / average assets $170,000 / (($2,683,000+$2,428,000)/2)

Return on Equity 12.90%

net income /average shareholders equity $170,000/ (($1,378,000+$1,258,000)/2)

EPS $0.43

Income available to common (net income) /number of shares $170,000 /($100,000/.25) =400,000

P/E 79

market price per share /earnings per share $34 / $0.43

Dividend Rate/Yield 0.37%

dividend per share / market price per share Dividend per share =$50,000/400,000= 0.125 then .125/34

Dividend Payout Ratio 29.06%

annual cash dividends / earnings per share $0.125 / $0.43

Book Value Per Share $3.45

common equity / share of stock 1,378,000/400,000

The Problem:

Dewart Pier Company (DPC) stock is listed at $34 per share.Select DPC data is below.Perform financial analysis on the data to evaluate DPC's financial position.

DEWART PIER COMPANY

Comparative Balance Sheet

December 31, 2020 and 2019

Assets 2020 2019

Current assets

Cash $610,000 $415,000

Accounts receivable 340,000 280,000

Inventories 95,000 115,000

Total current assets $1,045,000 $810,000

Property, plant, & equipment

Land $410,000 $400,000

Building 650,000 650,000

Equipment 936,000 900,000

$1,996,000 $1,950,000

Less: Accumulated depreciation (358,000) (332,000)

Total property, plant, & equipment $1,638,000 $1,618,000

Total assets $2,683,000 $2,428,000

Liabilities

Current liabilities

Accounts payable $250,000 $220,000

Interest payable 55,000 35,000

Total current liabilities $305,000 $255,000

Long-term liabilities

Long-term note payable 1,000,000 915,000

Total liabilities $1,305,000 $1,170,000

Stockholders' equity

Common stock ($0.25 par) $100,000 $100,000

Paid-in capital in excess of par 655,000 655,000

Retained earnings 623,000 503,000

Total stockholders' equity $1,378,000 $1,258,000

Total liabilities and equity $2,683,000 $2,428,000

DEWART PIER COMPANY

Statement of Retained Earnings

For the Year Ending December 31, 2020

Beginning retained earnings, January 1 $503,000

Plus: Net income 170,000

$673,000

Less: Dividends 50,000

Ending retained earnings, December 31 $623,000

DEWART PIER COMPANY

Income Statement

For the year ending December 31, 2020

Revenues $1,745,000

Cost of goods sold 980,000

Gross profit $765,000

Operating expenses

Salaries $295,000

Interest 65,000

Depreciation 40,000

Other operating expenses 155,000 555,000

Income before income taxes $210,000

Less: Income taxes 40,000

Net income $170,000