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* * Please break down the steps * * Paul Sabin organized Sabin Electronics 1 0 years ago to produce and sell several electronic devices.
Please break down the steps Paul Sabin organized Sabin Electronics years ago to produce and sell several electronic devices. Due to a cash shortage, the company is requesting a $ longterm loan from Gulfport State Bank. The companys financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year 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, Total liabilities Stockholders' equity: Common stock, $ par Retained earnings Total stockholders equity Total liabilities and stockholders equity $ $ Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ $ Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes Income taxes Net income Common dividends Net income retained Beginning retained earnings Ending retained earnings $ $ During the past year, the company introduced several new products and raised the selling prices on a number of existing products to improve its profit margin. The company also hired a new sales manager, who expanded sales into several new territories. Sales terms are n All sales are on account. Assume Paul Sabin has asked you to assess his companys profitability and stock market performance. Required: You decide first to assess the companys stock market performance. For both this year and last year, compute: The earnings per share. There has been no change in common stock over the last two years. The dividend yield ratio. The companys stock is currently selling for $ per share; last year it sold for $ per share. The dividend payout ratio. The priceearnings ratio. Assume that the industry norm for the priceearnings ratio is The book value per share of common stock. You decide next to assess the companys profitability. Compute the following for both this year and last year: The gross margin percentage. The net profit margin percentage. The return on total assets. Total assets at the beginning of last year were $ The return on equity. Stockholders equity at the beginning of last year was $ Is the companys financial leverage positive or negative?
Please break down the steps
Paul Sabin organized Sabin Electronics years ago to produce and sell several electronic devices. Due to a cash shortage, the company is requesting a $ longterm loan from Gulfport State Bank. The companys financial statements for the two most recent years follow:
Sabin Electronics
Comparative Balance Sheet
This Year Last Year
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,
Total liabilities
Stockholders' equity:
Common stock, $ par
Retained earnings
Total stockholders equity
Total liabilities and stockholders equity $ $
Sabin Electronics
Comparative Income Statement and Reconciliation
This Year Last Year
Sales $ $
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Interest expense
Net income before taxes
Income taxes
Net income
Common dividends
Net income retained
Beginning retained earnings
Ending retained earnings $ $
During the past year, the company introduced several new products and raised the selling prices on a number of existing products to improve its profit margin. The company also hired a new sales manager, who expanded sales into several new territories. Sales terms are n All sales are on account.
Assume Paul Sabin has asked you to assess his companys profitability and stock market performance.
Required:
You decide first to assess the companys stock market performance. For both this year and last year, compute:
The earnings per share. There has been no change in common stock over the last two years.
The dividend yield ratio. The companys stock is currently selling for $ per share; last year it sold for $ per share.
The dividend payout ratio.
The priceearnings ratio. Assume that the industry norm for the priceearnings ratio is
The book value per share of common stock.
You decide next to assess the companys profitability. Compute the following for both this year and last year:
The gross margin percentage.
The net profit margin percentage.
The return on total assets. Total assets at the beginning of last year were $
The return on equity. Stockholders equity at the beginning of last year was $
Is the companys financial leverage positive or negative?
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