Question
The financial statements for Castile Products, Incorporated, are given below: Castile Products, Incorporated Balance Sheet December 31 Assets Current assets: Cash $ 21,000 Accounts receivable,
The financial statements for Castile Products, Incorporated, are given below:
Castile Products, Incorporated Balance Sheet December 31 | |||||
Assets | |||||
---|---|---|---|---|---|
Current assets: | |||||
Cash | $ 21,000 | ||||
Accounts receivable, net | 190,000 | ||||
Merchandise inventory | 320,000 | ||||
Prepaid expenses | 11,000 | ||||
Total current assets | 542,000 | ||||
Property and equipment, net | 870,000 | ||||
Total assets | $ 1,412,000 | ||||
Liabilities and Stockholders' Equity | |||||
Liabilities: | |||||
Current liabilities | $ 250,000 | ||||
Bonds payable, 11% | 310,000 | ||||
Total liabilities | 560,000 | ||||
Stockholders equity: | |||||
Common stock, $5 per value | $ 180,000 | ||||
Retained earnings | 672,000 | ||||
Total stockholders equity | 852,000 | ||||
Total liabilities and stockholders equity | $ 1,412,000 |
Castile Products, Incorporated Income Statement For the Year Ended December 31 | ||
Sales | $ 2,150,000 | |
---|---|---|
Cost of goods sold | 1,230,000 | |
Gross margin | 920,000 | |
Selling and administrative expenses | 570,000 | |
Net operating income | 350,000 | |
Interest expense | 34,100 | |
Net income before taxes | 315,900 | |
Income taxes (30%) | 94,770 | |
Net income | $ 221,130 |
Account balances at the beginning of the year were: accounts receivable, $230,000; and inventory, $270,000. All sales were on account.
Assume that Castile Products, Incorporated paid dividends of $3.75 per share during the year. Also assume that the companys common stock had a market price of $60 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started