Question
Market Strength Analysis Vision, Inc.'s comparative income statements and comparative balance sheets follow. Vision, Inc. Comparative Income Statements For the Years Ended December 31, 2014
Market Strength Analysis
Vision, Inc.'s comparative income statements and comparative balance sheets follow.
Vision, Inc. | |||
Comparative Income Statements | |||
For the Years Ended December 31, 2014 and 2013 | |||
2014 | 2013 | ||
Net sales | $360,000 | $290,000 | |
Cost of goods sold | 224,000 | 176,000 | |
Gross margin | $136,000 | $114,000 | |
Operating expenses | 80,000 | 60,000 | |
Operating income | $ 56,000 | $ 54,000 | |
Interest expense | 14,000 | 10,000 | |
Income before income taxes | $ 42,000 | $ 44,000 | |
Income taxes expense | 14,000 | 16,000 | |
Net income | $ 28,000 | $ 28,000 | |
Earnings per share | $ 2.80 | $ 2.80 | |
Vision, Inc. | |||
Comparative Balance Sheets | |||
December 31, 2014 and 2013 | |||
2014 | 2013 | ||
Assets | |||
Current assets | $ 48,000 | $ 40,000 | |
Property, plant, and equipment (net) | 260,000 | 200,000 | |
Total assets | $308,000 | $240,000 | |
Liabilities and Stockholders' Equity | |||
Current liabilities | $ 36,000 | $ 44,000 | |
Long-term liabilities | 180,000 | 120,000 | |
Stockholders' equity | 92,000 | 76,000 | |
Total liabilities and stockholders' equity | $308,000 | $240,000 |
Net cash flows from operating activities were $42,000 in 2013 and $32,000 in 2014. Net capital expenditures were $60,000 in 2013 and $80,000 in 2014. Cash dividends were $12,000 in both years.
Compute the price/earnings (P/E) ratio and dividends yield for 2013 and 2014. The company had 10,000 shares of common stock outstanding in both years. The price of Vision's common stock was $60 in 2013 and $40 in 2014. Round your answers to one decimal place.
2014 | 2013 | |||
Price/earnings (P/E) ratio: | times | times | ||
Dividends yield: | % | % |
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