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just need 1 e and 2 c . thanks Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on

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Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $700,000 long-term loan from Gulfport State Bank, $200,000 of which will be used to bolster the Cash account and $500,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow. Sabin Electronics Comparative Balance Sheet This Year Last Year $ 150,000 @ 737,800 1,145,000 38,000 2,070, 800 2,388,888 $4,370, 800 $ 350,000 17,000 500, eee 795,000 42, eee 1,784, eee 1,530, eee $ 3,234,000 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 Bonds payable, 124 Total liabilities Stockholders' equity! Common stock, $2e par Retained earnings Total stockholders' equity Total abilities and stockholders' equity $ 900,000 900,000 1,8ee, een $ 420,00 980, eee 1,320, een 890,000 1,680, 800 2,570,800 $ 4,370, 800 890, eee 1,024,00 1,914,000 $3,234, eee Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ 6,000,000 $ 4,950,000 Cost of goods sold 4,075,000 3,650,000 Gross margin 1,925,000 1,300,000 Selling and administrative expenses 693,000 588,000 Net operating income 1,232,000 712,000 Interest expense 108,000 108,000 Net income before taxes 1,124,000 604,000 Income taxes (30%) 337,200 181,200 Net income 786,800 422,800 Common dividends 130,000 109,000 Net income retained 656,800 313,800 Beginning retained earnings 1,024,000 710,200 Ending retained earnings $ 1,680,800 $ 1,024,000 Required 1 Required 2 You decide first to assess the company's stock market performance. For both this year and last year, compute: a. The earnings per share. There has been no change in common stock over the last two years. (Round your answers to 2 decimal places.) b. The dividend yield ratio. The company's stock is currently selling for $60 per share; last year it sold for $50 per share. (Do not round Intermediate calculations. Round your percentage answers to 1 decimal place (I.e., 0.1234 should be entered as 12.3).) c. The dividend payout ratio. (Do not round Intermediate calculations. Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).) d. The price-earnings ratio. (Assume that the industry norm for the price-earnings ratio is 9.) (Do not round Intermediate calculations. Round your answers to 2 decimal places.) e. The book value per share of common stock. (Round your answers to 2 decimal places.) Show less This Year Last Year % % % % a. Earnings per share b. Dividend yield ratio c. Dividend payout ratio d. Price-earings ratio e. Book value per share Required 1 Required 2 You decide next to assess the company's profitability. Compute the following for both this year and last year: a. The gross margin percentage. (Round your percentage answers to 1 decimal place.) b. The net profit margin percentage. (Round your percentage answers to 1 decimal place.) c. The return on total assets. (Total assets at the beginning of last year were $3,194,000.) (Round your percentage answers to 1 decimal place.) d. The return on equity. (Stockholders' equity at the beginning of last year was $1,904,000.) (Round your percentage answers to 1 decimal place.) e. Is the company's financial leverage positive or negative? Show less This Year Last Year % % a. Gross margin percentage b. Net profit margin percentage c. Return on total assets d. Return on equity e. Financial Leverage % % % % % %

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