Problem 2 (88 points) You have just been hired as a financial analyst for Tobia Company. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Tobia's performance to its major competitors. The company has provided the following financial data: Year 1 Balance Sheet December 31, Year 2 and Year 1 Assets Year 2 Current assets: Cash $ 201,000 Accounts receivable, net 236,000 Inventory 158,000 Prepaid expenses 96,000 Total current assets 691,000 Plant and equipment, net 842.000 Total assets $ 1,533,000 $ 110,000 200,000 190,000 90,000 590,000 920,000 $ 1,510,000 $ Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total liabilities Stockholders' equity: Common stock, $3 par value Additional paid-in capital Retained earnings Total stockholders' equity Total liabilities & stockholders' equity 173,000 36,000 88.000 297,000 170.000 467,000 150,000 40,000 90.000 280,000 170,000 450,000 210,000 60,000 796.000 1,066,000 $ 1,533,000 210,000 60,000 790,000 1,060,000 S 1,510,000 $ Income Statement For the Year Ended December 31, Year 2 Sales (all on account) Cost of goods sold Gross margin Operating expenses Net operating income Interest expense Net income before taxes Income taxes (35%) Net income 1,410,000 850,000 560,000 525,077 34,923 16,000 18,923 6,623 12,300 $ ends on common stock during Year 2 totaled $6,300. The market price of common stock at the end of Year 2 was $1.78 per share. To begin your assignment you gather the following financial data and ratios that are typical or companies in Tobia Company's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio : 2.3 1.2. 30 days 60 days 5.50% 0.65 4.2 B. You decide next to assess the company's stock market performance. Compute the following for this year: a. The earnings per share. (4 points) b. The dividend yield ratio. (4 points) c. The dividend payout ratio. (4 points) d. The price-earnings ratio. How do investors regard Tobia Company as compared to other companies in the industry? Explain. (5 points) dit and annat man a t the