I need help understanding how to find dividend yield, dividend payout, and price earnings. The book we have doesn't give a good description so please give as much detail as you can so I can understand how to do it. I think I have earnings per share and book value correct. But if I don't could you please show me how to do the calculations correctly?
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Lydexs performance to its major competitors. The company's financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year $ 1,040,000 0 3,020,000 3,680,000 270,000 8,010,000 9,680,000 $ 17,690,000 $ 1,280,000 300,000 2,120,000 2,300,000 210,000 6,210,000 9,130,000 $ 15,340,000 Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 10% Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 4,090,000 3,720,000 7,810,000 $ 3,140,000 3,120,000 6,260,000 7,500,000 2,380,000 9,880,000 $ 17,690,000 7,500,000 1,580,000 9,080,000 $ 15,340,000 Lydex Company Comparative Income Statement and Reconciliation This Year Sales (all on account) $ 15,940,000 Cost of goods sold 12,752,000 Gross margin 3,188,000 Selling and administrative expenses 1,216,000 Net operating income 1,972,000 Interest expense 372,000 Net income before taxes 1,600,000 Income taxes (30%) 480,000 Net income 1,120,000 Common dividends 320,000 Net income retained 800,000 Beginning retained earnings 1,580,000 Ending retained earnings $ 2,380,000 Last Year $ 14,380,000 10,785,000 3,595,000 1,636,000 1,959,000 312,000 1,647,000 494,100 1,152,900 576,450 576,450 1,003,550 $ 1,580,000 To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio 2.3 1.2 32 days 60 days 8.6% 0.7 5.8 10 2. You decide next to assess the company's stock market performance. Assume that Lydex's stock price at the end of this year is $110 per share and that at the end of last year it was $78. For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places.) a. The earnings per share. b. The dividend yield ratio. c. The dividend payout ratio. d. The price-earnings ratio. e. The book value per share of common stock. This Year Last Year $ 11.20 $ 11.53 % % a. The earnings per share b. The dividend yield ratio c. The dividend payout ratio d. The price-earnings ratio e. The book value per share of common stock % % $ 98.80 $ 90.80
