Question
The financial statements for Castile Products, Incorporated are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash $ 6,500 Accounts receivable,
The financial statements for Castile Products, Incorporated are given below:
Castile Products, Incorporated Balance Sheet December 31 | |||||
---|---|---|---|---|---|
Assets | |||||
Current assets: | |||||
Cash | $ 6,500 | ||||
Accounts receivable, net | 35,000 | ||||
Merchandise inventory | 70,000 | ||||
Prepaid expenses | 3,500 | ||||
Total current assets | 115,000 | ||||
Property and equipment, net | 185,000 | ||||
Total assets | $ 300,000 | ||||
Liabilities and Stockholders' Equity | |||||
Liabilities: | |||||
Current liabilities | $ 50,000 | ||||
Bonds payable, 10% | 80,000 | ||||
Total liabilities | 130,000 | ||||
Stockholders equity: | |||||
Common stock, $5 per value | 30,000 | ||||
Retained earnings | 140,000 | ||||
Total stockholders equity | 170,000 | ||||
Total liabilities and stockholders equity | $ 300,000 |
Castile Products, Incorporated Income Statement For the Year Ended December 31 | ||
---|---|---|
Sales | $ 420,000 | |
Cost of goods sold | 292,500 | |
Gross margin | 127,500 | |
Selling and administrative expenses | 89,500 | |
Net operating income | 38,000 | |
Interest expense | 8,000 | |
Net income before taxes | 30,000 | |
Income taxes (30%) | 9,000 | |
Net income | $ 21,000 |
Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.
Assume that Castile Products, Incorporated, paid dividends of $2.10 per share during the year. Also assume that the companys common stock had a market price of $42 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 nearest whole number (i.e., 0.1234 should be entered as 12).)
3. Dividend yield ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage final answer to nearest whole number (i.e., 0.1234 should be entered as 12).)
4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)
5. Book value per share. (Round your answer to 2 decimal places.)
\begin{tabular}{|l|l|l|} \hline 1. Earnings per share & & \\ \hline 2. Dividend payout ratio & & % \\ \hline 3. Dividend yield ratio & & % \\ \hline 4. Price-earnings ratio & & \\ \hline 5. Book value per share & & \\ \hline \end{tabular}
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