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Please explain and show the computations for the return on common stockholders equity, price earnings ratio, and dividend yield. I'm confused on how to do
Please explain and show the computations for the return on common stockholders equity, price earnings ratio, and dividend yield. I'm confused on how to do those parts. Thanks
Chapter 17 Analysis of Financial Statements 645 Fargo Company Ball Company Ball Company from the current year-end balance sheets ... $ 36,500 79,500 Cast Accounts receivable, net......... Merchandise inventory.... Prepaid expenses... Punt assets, net...... $ 20,000 88,700 86,800 9,700 176.900 $382.100 Fargo Company Data from the current year's Income statement Sales $393,600 Cost of goods sold. ........... 290,600 Interest expense .................... 5.900 Income tax expense 5,700 Net Income 33,850 Basic earnings per share.............. 1.27 82,000 10,100 252,300 $460,400 $667.500 480.000 12,300 12,300 61,700 2.19 Liabilities and Equity Current liabilities................. Long-term notes payable. Common stock, $5 par value........... Retained earnings.................... Total liabilities and equity.............. $ 90,500 93,000 133,000 65,600 $382,100 $ 97,000 93,300 141,000 129,100 $460,400 Beginning-of-year balance sheet data Accounts receivable, net.............. Merchandise inventory....... . .. Total assets ....... . . Common stock. $5 par value .......... Retained earnings $ 72,200 105,100 383,400 133,000 49.100 $ 73,300 80,500 443,000 141,000 109,700 Check (1) Fargo: Accounts receivable turnover. 49 Required 1. For both companies compute the (a) current ratio, (b) acid-test ratio. (c) accounts receivable turn- over, (d) inventory turnover, (e) days' sales in inventory, and (days' sales uncollected. Round to one decimal place. Identify the company you consider to be the better short-term credit risk and explain why. 2. For both companies compute the (a) profit margin ratio, (b) total asset turnover. (c) return on total assets, and (d) return on common stockholders' equity. Assuming that each company paid cash dividends of $1.50 per share and each company's stock can be purchased at $25 per share, compute their (@price-earnings ratios and ) dividend yields. Round to one decimal place; for part b. round to two decimals. Identify which company's stock you would recommend as the better investment and explain why. (21 Bolt Profit margin. 9.2% PE 114Step by Step Solution
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