Question
The financial statements for Leslo Inc. are as follows: LESLO INC. Balance Sheet March 31 Assets Current assets: Cash $ 6,500 Accounts receivable, net 35,000
The financial statements for Leslo Inc. are as follows:
LESLO INC. | |||||
Balance Sheet | |||||
March 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 Shareholders Equity | |||||
Liabilities: | |||||
Current liabilities | $ | 50,000 | |||
Bonds payable, 10% | 80,000 | ||||
Total liabilities | 130,000 | ||||
Shareholders equity: | |||||
Common shares, no par (6,000 @ $5) | $ | 30,000 | |||
Retained earnings | 140,000 | ||||
Total shareholders equity | 170,000 | ||||
Total liabilities and shareholders equity | $ | 300,000 | |||
LESLO INC. | ||
Income Statement | ||
For the Year Ended March 31 | ||
Sales | $ | 420,000 |
Less: Cost of goods sold | 292,500 | |
Gross margin | 127,500 | |
Less: Operating 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 as follows: accounts receivable, $25,000; inventory, $60,000. All sales were on account.
Assume that Leslo Inc. paid dividends of $2.10 per share during the year. Also assume that the companys common shares had a market price of $42 each at the end of the year and there was no change in the number of outstanding common shares 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 answer to nearest whole number.)
3. Dividend yield ratio. (Round your percentage answer to nearest whole number.)
4. Priceearnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)
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