Sandhill Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.

Sandhill Medical

Comparative Balance Sheet

As of December 31

Assets 2020 2019

Current assets $376,000 $417,500

Cash 1,055,000 776,400

Accounts receivable, net 731,000 681,050

Inventory 381,400 247,050

Other current assets 2,543,400 2,122,000

Total current assets 8,720,425 8,439,980

Property, plant, & equipment, net $11,263,825 $10,561,980

Total assets

Liabilities and Stockholders' Equity

Current liabilities $3,203,000 $2,846,100

Long-term debt 3,702,700 3,892,700

Total liabilities 6,905,700 6,738,800

Preferred stock, $5 par value 58,900 58,900

Common stock, $0.25 par value 104,600 103,800

Retained earnings 4,194,625 3,660,480

Total stockholders' equity 4,358,125 3,823,180

Total liabilities and stockholders' equity$11,263,825 $10,561,980

Sandhill Medical

Comparative Income Statement and Statement of Retained Earnings

For the Year

2020 2019

Sales revenue (all on account) $10,177,200 $9,613,900

Cost of goods sold 5,612,200 5,298,750

Gross profit 4,565,000 4,315,150

Operating expenses 2,840,250 2,634,150

Net operating income 1,724,750 1,681,000

Interest expense 300,400 308,600

Net income before taxes 1,424,350 1,372,400

Income taxes (30%) 427,305 411,720

Net income $997,045 $960,680

Dividends paid

Preferred dividends 29,500 29,550

Common dividends 433,400 413,050

Total dividends paid 462,900 442,600

Net income retained 534,145 518,080

Retained earnings, beginning of year 3,660,480 3,142,400

Retained earnings, end of year $4,194,625 $3,660,480

Calculate the earnings per share (average of 410,000 shares outstanding for the year) for 2020. (Round answer to 2 decimal places, e.g. 2.55.)

Earning per share

Calculate the price/earnings ratio (market price of $48 at year-end) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)

Price/earnings ratio

Calculate the dividend payout ratio (dividends of $1.25 per common share for the year) for 2020. (Round answer to 1 decimal place, e.g. 2.5.)

Dividend payout ratio