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Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.4.10P: Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of...
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FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 Balance Sheet Accounts 1997 1998 Cash P30,000 P52,000 Marketable Securities 170,000 200,000 Accounts Receivable, net 100,000 200,000 Inventories 150,000 100,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 12,000 8,000 500,000 Long-term Notes-Due 2008 450,000 100,000 100,000 15% Preferred Stock, P100 par Common Stock, P10 par Retained Earnings 200,000 200,000 50,000 100,000 1998 Income Statement Accounts Sales P1,050,000 Sales Returns and Allowances 50,000 100,000 Inventory, December 31, 1998 Inventory, December 31, 1997 150,000 Purchases 550,000 Selling Expenses 80,000 120,000 Administrative Expenses (including depreciation of P25,000) Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 32,500 2. Dividends paid on common stock 3. Market price per share of common stock 18 7. Evaluate the firm's profitability for 1998 by computing: a. Return on Common Stockholder's Equity b. Earnings Per Share (EPS) c. Price-earnings Ratio d. Pay-out Ratio to Common Shares e. Dividend Yield Per Share on Common Stock 7
Transcribed Image Text:FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income statement data of PRT Company: December 31 Balance Sheet Accounts 1997 1998 Cash P30,000 P52,000 Marketable Securities 170,000 200,000 Accounts Receivable, net 100,000 200,000 Inventories 150,000 100,000 Machinery and Equipment, net 340,000 300,000 110,000 100,000 Land and Building, net Goodwill 80,000 80,000 Deferred Charges 20,000 18,000 Notes Payable, Trade 20,000 30,000 122,000 158,000 Accounts Payable, Trade Expenses Payable 12,000 8,000 500,000 Long-term Notes-Due 2008 450,000 100,000 100,000 15% Preferred Stock, P100 par Common Stock, P10 par Retained Earnings 200,000 200,000 50,000 100,000 1998 Income Statement Accounts Sales P1,050,000 Sales Returns and Allowances 50,000 100,000 Inventory, December 31, 1998 Inventory, December 31, 1997 150,000 Purchases 550,000 Selling Expenses 80,000 120,000 Administrative Expenses (including depreciation of P25,000) Interest on Long-term Notes 50,000 Income Taxes, 35% 52,500 Additional Information: 1. Dividends paid on preferred stock 15,000 32,500 2. Dividends paid on common stock 3. Market price per share of common stock 18 7. Evaluate the firm's profitability for 1998 by computing: a. Return on Common Stockholder's Equity b. Earnings Per Share (EPS) c. Price-earnings Ratio d. Pay-out Ratio to Common Shares e. Dividend Yield Per Share on Common Stock 7
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