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I just need help finding the return on common equity. Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements
I just need help finding the return on common equity.
Exercise 12-82 Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2019 2018 2017 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before income taxes $645,179 $745,497 $660,302 Provision for income taxes (254,000) (290,000) (257,000) Net income $391,179 $455,497 $403,302 Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2019 Dec. 31, 2018 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700 803,707 Other 109,456 101,811 Total current assets $2,220,625 $1,784,130 Property and equipment, net 1,666,588 1,813,948 Other assets 247,892 248,372 Total assets $4,135,105 $3,846,450 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $250,363 $309,092 Accrued expenses 347,892 274,220 Other current liabilities 15,700 0 Income taxes 93,489 137,466 Total current liabilities $707,444 $720,778 Long-term debt 650,000 541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities 1,693,812 1,578,833 Stockholders' equity: Preferred stock $100,000 $100,000 Common stock 89,727 89,727 Additional paid-in capital-common stock 128,906 127,776 Retained earnings 2,397,112 2,136,794 $2,715,745 $2,454,297 (186,680) Less: Treasury stock, at cost (274,452) Total stockholders' equity $2,441,293 $2,267,617 Total liabilities and stockholders' equity $4,135,105 $3,846,450 Use the information provided above and below to respond to the following requirements. Year ended December 31, Item 2019 2018 Average number of common shares outstanding (thousands) 362,202 364,398 Preferred dividends (thousands) $24,000 $24,000 0.36 1.54 Dividends per common share Common dividends (thousands) 130,861.00 561,172.30 Common stock repurchases 0 0 Market price per share: High 83.25 79.10 Low 63.25 59.00 Close 78.42 66.36 At January 1, 2018, total stockholders' equity was $2,083,122 and there was no preferred stock. Required: 1. Compute the earnings per share, return on common equity, dividend yield ratio, and dividend payout ratio (in percentage terms, rounded to two decimal places except for EPS, which should be rounded to nearest cent) for 2018 and 2019. 2019 2018 Earnings per share 1.01 $ 1.18 Return on common equity 16.29 x % 20.30 x % Dividend yield ratio 0.46 % 2.32 % Dividend payout ratio 33.45 % 123.20 %Step by Step Solution
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