Question
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 24,000 Accounts receivable,
The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 24,000 Accounts receivable, net 210,000 Merchandise inventory 370,000 Prepaid expenses 7,000 Total current assets 611,000 Property and equipment, net 820,000 Total assets $ 1,431,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 250,000 Bonds payable, 11% 340,000 Total liabilities 590,000 Stockholders equity: Common stock, $10 per value $ 170,000 Retained earnings 671,000 Total stockholders equity 841,000 Total liabilities and stockholders equity $ 1,431,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales $ 2,180,000 Cost of goods sold 1,250,000 Gross margin 930,000 Selling and administrative expenses 590,000 Net operating income 340,000 Interest expense 37,400 Net income before taxes 302,600 Income taxes (30%) 90,780 Net income $ 211,820 Account balances at the beginning of the year were: accounts receivable, $200,000; and inventory, $340,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.95 per share during the year. Also assume that the companys common stock had a market price of $72 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.) 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage final answer to 2 decimal places. (i.e., 0.1234 should be entered as 12.34).) 3. Dividend yield ratio. (Round your percentage answer to 2 decimal places. (i.e., 0.1234 should be entered as 12.34).) 4. Price-earnings ratio. (Round your intermediate calculations and final answer to 2 decimal places.) 5. Book value per share. (Round your answer to 2 decimal places.)
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