Question
Recent financial statements for Madison Company follow: Madison Company Balance Sheet June 30 Assets Current assets: Cash $ 22,000 Accounts receivable, net 250,000 Merchandise inventory
Recent financial statements for Madison Company follow: |
Madison Company Balance Sheet June 30 | ||||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 22,000 | ||||
Accounts receivable, net | 250,000 | |||||
Merchandise inventory | 400,000 | |||||
Prepaid expenses | 9,000 | |||||
Total current assets | 681,000 | |||||
Plant and equipment, net | 880,000 | |||||
Total assets | $ | 1,561,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Liabilities: | ||||||
Current liabilities | $ | 210,000 | ||||
Bonds payable, 11% | 320,000 | |||||
Total liabilities | 530,000 | |||||
Stockholders equity: | ||||||
Common stock, $5 par value | $ | 180,000 | ||||
Retained earnings | 851,000 | |||||
Total stockholders equity | 1,031,000 | |||||
Total liabilities and stockholders' equity | $ | 1,561,000 | ||||
Madison Company Income Statement For the Year Ended June 30 | |||
Sales | $ | 2,220,000 | |
Cost of goods sold | 1,200,000 | ||
Gross margin | 1,020,000 | ||
Selling and administrative expenses | 650,000 | ||
Net operating income | 370,000 | ||
Interest expense | 35,200 | ||
Net income before taxes | 334,800 | ||
Income taxes | 100,440 | ||
Net income | $ | 234,360 | |
Account balances at the beginning of the companys fiscal year were: accounts receivable, $160,000; and inventory, $300,000. All sales were on account. |
Assume that Madison Company paid dividends of $3.25 per share during the year. Also assume that the companys common stock had a market price of $71.00 per share on June 30 and that there was no change in the number of outstanding shares of common stock during the fiscal year. |
Required: |
Compute the following: |
1. | Earnings per share. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Earnings per share | $ |
2. | Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.Omit the "%" sign in your response.) |
Dividend payout ratio | % |
3. | Dividend yield ratio. (Round your answer to 1 decimal place.Omit the "%" sign in your response.) |
Dividend yield ratio | % |
4. | Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) |
Price-earnings ratio |
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