Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 3 1 Assets Current assets: Cash $ 1 9

The financial statements for Castile Products, Incorporated, are given below:
Castile Products, Incorporated
Balance Sheet
December 31
Assets
Current assets:
Cash $ 19,000
Accounts receivable, net 160,000
Merchandise inventory 310,000
Prepaid expenses 8,000
Total current assets 497,000
Property and equipment, net 870,000
Total assets $ 1,367,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities $ 280,000
Bonds payable, 9%380,000
Total liabilities 660,000
Stockholders equity:
Common stock, $5 per value $ 200,000
Retained earnings 507,000
Total stockholders equity 707,000
Total liabilities and stockholders equity $ 1,367,000
Castile Products, Incorporated
Income Statement
For the Year Ended December 31
Sales $ 2,200,000
Cost of goods sold 1,240,000
Gross margin 960,000
Selling and administrative expenses 620,000
Net operating income 340,000
Interest expense 34,200
Net income before taxes 305,800
Income taxes (30%)91,740
Net income $ 214,060
Account balances at the beginning of the year were: accounts receivable, $190,000; and inventory, $280,000. All sales were on account.
Assume that Castile Products, Incorporated paid dividends of $3.65 per share during the year. Also assume that the companys common stock had a market price of $56 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.)
3. Dividend yield ratio. (Round your percentage answer to 2 decimal places.)
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.)

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

Accounting concepts and applications

Authors: Albrecht Stice, Stice Swain

11th Edition

978-0538750196, 538745487, 538750197, 978-0538745482

More Books

Students also viewed these Accounting questions