Statement of Financial Position

December 31, Year 2 and Year 1

(in thousands of dollars)

Year 2

Year 1

Assets

Current assets:

Cash

Php 320

Php 180

Accounts receivable

220

240

Inventory

140

130

Prepaid expenses

20

20

Total current assets

700

570

Plant and equipment, net

860

920

Total assets

Php1,560

Php1,490

Liabilities and Stockholders Equity

Current liabilities:

Accounts payable

Php 200

Php 170

Accrued liabilities

80

80

Notes payable, short term

40

40

Total current liabilities

320

290

Bonds payable

210

220

Total liabilities

530

510

Stockholders equity:

Preferred stock, Php100 par value, 5%

100

100

Common stock, Php1 par value

100

100

Additional paid-in capitalcommon stock

150

150

Retained earnings

680

630

Total stockholders equity

1,030

980

Total liabilities & stockholders equity

Php1,560

Php1,490

Income Statement

For the Year Ended December 31, Year 2

(in thousands of dollars)

Sales (all on account)

Php1,220

Cost of goods sold

790

Gross margin

430

Selling and administrative expense

268

Net operating income

162

Interest expense

26

Net income before taxes

136

Income taxes (30%)

41

Net income

Php 95

Dividends on common stock during Year 2 totaled Php40 thousand. Dividends on preferred stock totaled Php5 thousand. The market price of common stock at the end of Year 2 was Php12.87 per share.

Required:

Compute the following for Year 2:

a. Gross margin percentage.

b. Earnings per share (of common stock).

c. Price-earnings ratio.

d. Dividend payout ratio.

e. Dividend yield ratio.

f. Return on total assets.

g. Return on common stockholders' equity.

h. Book value per share.

i. Working capital.

j. Current ratio.

k. Acid-test ratio.

l. Accounts receivable turnover.

m. Average collection period.

n. Inventory turnover.

o. Average sale period.

p. Times interest earned.

q. Debt-to-equity ratio.

4. Espinola Corporation's most recent balance sheet and income Statement appear below: Statement official Potion December 31. Your and Years in hands of dollar Year Your Ats The 21 10 Accounts receivable Intor Prepaid expo Total current Plant and equipment, et 30 130 29 570 970 Totalt Liability and Stockholdesquity Current hilities Php 20 Php 17 . 0 80 40 190 com payable Accrued liabilities Notes payable, short term Total current liabilities Bonds payable Total lisbilities Stockholdenequity Preferred stack, Miptor value Common stock, Phpl par vale Additional puid-in capital-common stock Retained Total stockholders' quity 100 100 100 100 150 150 10 10 Del P. 49 Total liabilities & sockholders equity Income Statement For the Year Ended December 31. Year 2 in thousands of dollar Php22 Sales call on account Cost of yod old 450 Selling and administrative expome Net operating income Interest expense Net income before takes Income (30) Net income 20984227 Dividends on common stock during Year 2 totaled Php40 thousand Dividends on preferred stock totaled Php5 thousand. The market price of common stock at the end of Year 2 was Php12.87 per share