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Recent financial statements for Madison Company follow: Madison Company Balance Sheet December 31 Assets Current assets: Cash $ 25,800 Accounts receivable, net 192,000 Merchandise inventory
Recent financial statements for Madison Company follow: |
Madison Company Balance Sheet December 31 | ||||||
Assets | ||||||
Current assets: | ||||||
Cash | $ | 25,800 | ||||
Accounts receivable, net | 192,000 | |||||
Merchandise inventory | 306,000 | |||||
Prepaid expenses | 16,200 | |||||
Total current assets | 540,000 | |||||
Plant and equipment, net | 970,000 | |||||
Total assets | $ | 1,510,000 | ||||
Liabilities and Stockholders' Equity | ||||||
Liabilities: | ||||||
Current liabilities | $ | 240,000 | ||||
Bonds payable, 10% | 360,000 | |||||
Total liabilities | 600,000 | |||||
Stockholders equity: | ||||||
Common stock, $5 par value | $ | 140,000 | ||||
Retained earnings | 770,000 | |||||
Total stockholders equity | 910,000 | |||||
Total liabilities and stockholders' equity | $ | 1,510,000 | ||||
Madison Company Income Statement For the Year Ended December 31 | |||
Sales | $ | 2,140,000 | |
Cost of goods sold | 1,284,000 | ||
Gross margin | 856,000 | ||
Selling and administrative expenses | 650,600 | ||
Net operating income | 205,400 | ||
Interest expense | 32,000 | ||
Net income before taxes | 173,400 | ||
Income taxes (40%) | 69,360 | ||
Net income | $ | 104,040 | |
Madison Company paid dividends of $3.19 per share during the year. The company's common stock had a market price of $65 per share on December 31. Assets at the beginning of the year totaled $1,268,400 and stockholders' equity totaled $837,200. |
Required: |
Compute the following: |
a. | Earnings per share of common stock. (Round your answer to 2 decimal places.) |
Earnings per share of common stock | $ |
b. | Dividend payout ratio. (Round intermediate calculations to 2 decimal places. Round your final answer to 2 decimal places.) |
Dividend payout ratio | % |
c. | Dividend yield ratio. (Round your answer to 2 decimal places.) |
Dividend yield ratio | % |
d. | Price-earnings ratio. (Round intermediate calculations to 2 decimal places. Round your final answer to 1 decimal place.) |
Price-earnings ratio |
e. | Return on total assets. (Round your answer to 2 decimal places.) |
Return on total assets | % |
f. | Return on common stockholders' equity. (Round your answer to 1 decimal place.) |
Return on common stockholders' equity | % |
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