Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise

image text in transcribedimage text in transcribed

The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory Prepaid expenses $ 23,000 230,000 350,000 7,000 Total current assets Property and equipment, net 610,000 830,000 Total assets $1,440,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% $ 270,000 340,000 610,000 Total liabilities Stockholders' equity: Common stock, $5 par value Retained earnings $ 170,000 660,000 Total stockholders' equity 830,000 Total liabilities and equity $1,440,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $2,210,000 Cost of goods sold 1,240,000 Gross margin Selling and administrative expenses 970,000 640,000 Net operating income Interest expense 330,000 34,000 Net income before taxes Income taxes (30%) 296,000 88,800 Net income $ 207,200 Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $320,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.05 per share during the year. Also assume that the company's common stock had a market price of $54 at the end of the year and there was no change in the number of outstanding shares of common stock during the year. Required: Compute financial ratios as follows: 1. Earnings per share. (Round your answer to 2 decimal places.) Earnings per share 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) Dividend payout ratio % 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 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 5. Book value per share. (Round your answer to 2 decimal places.) Book value per share

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Assessment Auditing A Company Personality

Authors: Adrian Furnham, Barrie Gunter

1st Edition

1138887641, 978-1138887640

More Books

Students also viewed these Accounting questions

Question

What is meant by 'Wealth Maximization ' ?

Answered: 1 week ago