Question
Lundberg 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
Lundberg 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 | |||
Asset: | ||||
Current assets: | ||||
Cash | $ | 180 | $ | 190 |
Accounts receivable | 290 | 300 | ||
Inventory | 190 | 180 | ||
Prepaid expenses | 15 | 15 | ||
Total current assets | 675 | 685 | ||
Plant and equipment, net | 962 | 942 | ||
Total assets | $ | 1,637 | $ | 1,627 |
Liabilities and stockholders' equity: | ||||
Current liabilities: | ||||
Accounts payable | $ | 240 | $ | 230 |
Accrued liabilities | 130 | 130 | ||
Notes payable, short term | 180 | 190 | ||
Total current liabilities | 550 | 550 | ||
Bonds payable | 270 | 320 | ||
Total liabilities | 820 | 870 | ||
Stockholders' equity: | ||||
Preferred stock, $100 par value, 10% | 280 | 280 | ||
Common stock, $1 par value | 100 | 100 | ||
Additional paid-in capital--common stock | 110 | 110 | ||
Retained earnings | 327 | 285 | ||
Total stockholders' equity | 817 | 775 | ||
Total liabilities and stockholders' equity | $ | 1,637 | $ | 1,645 |
Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) | |||
Sales (all on account) | $ | 1,410 | |
Cost of goods sold | 858 | ||
Gross margin | 552 | ||
Selling and administrative expenses | 370 | ||
Net operating income | 182 | ||
Interest expense | 39 | ||
Net income before taxes | 143 | ||
Income taxes (30%) | 43 | ||
Net income | $ | 100 | |
Dividends on common stock during Year 2 totaled $30 thousand. The market price of common stock at the end of Year 2 was $9.44 per share. |
Required: | |
a. | Compute the gross margin percentage for Year 2.(Round your answer to 1 decimal place. Omit the "%" sign in your response.) |
Gross margin percentage | % |
b. | Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Earnings per share | $ |
c. | Compute the price-earnings ratio for Year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place.) |
Price-earnings ratio |
d. | Compute the dividend payout ratio for Year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.) |
Dividend payout ratio | % |
e. | Compute the dividend yield ratio for Year 2.(Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Dividend yield ratio | % |
f. | Compute the return on total assets for Year 2.(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Return on total assets | % |
g. | Compute the return on common stockholders' equity for Year 2.(Round your answer to 2 decimal places.Omit the "%" sign in your response.) |
Return on common stockholders' equity | % |
h. | Compute the book value per share for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Book value per share | $ |
i. | Compute the working capital for Year 2.(Input your answer in thousands of dollars. Omit the "$" sign in your response.) |
Working capital | $ |
j. | Compute the current ratio for Year 2.(Round your answer to 2 decimal places.) |
Current ratio |
k. | Compute the acid-test ratio for Year 2.(Round your answer to 1 decimal place.) |
Acid-test ratio |
l. | Compute the accounts receivable turnover for Year 2.(Round your answer to 2 decimal places.) |
Accounts receivable turnover |
m. | Compute the average collection period for Year 2.(Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.) |
Average collection period | days |
n. | Compute the inventory turnover for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Inventory turnover | $ |
o. | Compute the average sale period for Year 2.(Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.) |
Average sale period | days |
p. | Compute the times interest earned for Year 2.(Round your answer to 2 decimal places.) |
Times interest earned |
q. | Compute the debt-to-equity ratio for Year 2.(Round your answer to 2 decimal places.) |
Debt-to-equity ratio |
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