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Determine the following measures for 2016, rounding to one decimal place, except per- share amounts, which should be rounded to the nearest penny: 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yield PR 14-4B Nineteen measures of solvency and profitability OBJ. 2, 3 The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was $119.70 on December 31, 2016. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 Retained earnings, January 1...... $5,375,000 Add net income for year ........ 900,000 Total .... $6,275,000 Deduct dividends: On preferred stock ..... $ 45,000 On common stock. ....... 50,000 Total. $ 95,000 Retained earnings, December 31 ...... $6,180,000 2015 $4,545,000 925,000 $5,470,000 $ 45,000 50,000 $ 95,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 2016 and 2015 2016 Sales ....... $10,000,000 Cost of goods sold.................... ... 5,350,000 Gross profit ............ $ 4,650,000 Selling expenses..... $ 2,000,000 Administrative expenses............. 1,500,000 Total operating expenses ............ $ 3,500,000 Income from operations ........... $ 1,150,000 Other income......................... 150,000 $ 1,300,000 Other expense interest)...... 170,000 Income before income tax . $ 1.130,000 Income tax expense 230,000 Net income...... $ 900,000 2015 $9,400,000 4,950,000 $4,450,000 $1,880,000 1,410,000 $3,290,000 $1,160,000 140,000 $1,300,000 150,000 $1,150,000 225,000 $ 925.000 Stargel Inc. Comparative Balance Sheet December 31, 2016 and 2015 Dec 31, 2016 Dec. 31, 2015 10 Assets Current assets: Cash. Marketable securities Accounts receivable (net). Inventories...... Prepaid expenses Total current assets.... Long-term investments ........ Property, plant, and equipment (net) .... Total assets ..... Liabilities Current liabilities....... Long-term liabilities: Mortgage note payable, 8.8%, due 2021 Bonds payable, 9%, due 2017......... Total long-term liabilities .... Total liabilities ...... .. $ 500,000 1,010,000 740,000 1,190,000 250,000 $3,690,000 2,350,000 3,740,000 $9,780,000 $400,000 1,000,000 510,000 950,000 229,000 $3,089,000 2,300,000 3,366,000 $8,755,000 $ 900,000 $ 880,000 $ 200,000 1,500,000 $1,700,000 $2,600,000 1,500,000 $1,500,000 $2,380,000 Stockholders' Equity Preferred $0.90 stock, $10 par....... Common stock, $5 par........ Retained earnings.......... Total stockholders' equity........ Total liabilities and stockholders' equity...... $ 500,000 500,000 6,180,000 $7,180,000 $9,780,000 $ 500,000 500,000 5,375,000 $6,375,000 $8,755,000
