Lydex Company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 1,020,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2,040,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 210,000 Total current assets 7,890,000 5,910,000 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,020,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,070,000 $ 3,100,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,770,000 6,200,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,260,000 1,320,000 Total stockholders' equity 9,760,000 8,820,000 Total liabilities and stockholders' equity $ 17,530,000 $ 15,020,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,920,000 $ 14,180,000 Cost of goods sold 12,736,000 10,635,000 Gross margin 3,184,000 3,545,000 Selling and administrative expenses 1,014,000 1,628,000 Net operating income 2,170,000 1,917,000 Interest expense 370,000 310,000 Net income before taxes 1,800,000 1,607,000 Income taxes (30%) 540,000 482,100 Net income 1,260,000 1,124,900 Common dividends 320,000 562,450 Net income retained 940,000 562,450 Beginning retained earnings 1,320,000 757,550 Ending retained earnings $ 2,260,000 $ 1,320,000 The following financial data and ratios are typical of companies in Lydex Company’s industry: Current ratio 2.3 Acid-test ratio 1.1 Average collection period 32 days Average sale period 60 days Return on assets 9.9% Debt-to-equity ratio 0.7 Times interest earned ratio 5.9 Price-earnings ratio 10 To assess the company’s stock market performance, compute the following for this year and last year. Assume Lydex’s stock price at the end of this year and last year was $106 and $74, respectively. The earnings per share. The dividend yield ratio. The dividend payout ratio. The price-earnings ratio. The book value per share of common stock.
Lydex Company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 1,020,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2,040,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 210,000 Total current assets 7,890,000 5,910,000 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,020,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,070,000 $ 3,100,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,770,000 6,200,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,260,000 1,320,000 Total stockholders' equity 9,760,000 8,820,000 Total liabilities and stockholders' equity $ 17,530,000 $ 15,020,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,920,000 $ 14,180,000 Cost of goods sold 12,736,000 10,635,000 Gross margin 3,184,000 3,545,000 Selling and administrative expenses 1,014,000 1,628,000 Net operating income 2,170,000 1,917,000 Interest expense 370,000 310,000 Net income before taxes 1,800,000 1,607,000 Income taxes (30%) 540,000 482,100 Net income 1,260,000 1,124,900 Common dividends 320,000 562,450 Net income retained 940,000 562,450 Beginning retained earnings 1,320,000 757,550 Ending retained earnings $ 2,260,000 $ 1,320,000 The following financial data and ratios are typical of companies in Lydex Company’s industry: Current ratio 2.3 Acid-test ratio 1.1 Average collection period 32 days Average sale period 60 days Return on assets 9.9% Debt-to-equity ratio 0.7 Times interest earned ratio 5.9 Price-earnings ratio 10 To assess the company’s stock market performance, compute the following for this year and last year. Assume Lydex’s stock price at the end of this year and last year was $106 and $74, respectively. The earnings per share. The dividend yield ratio. The dividend payout ratio. The price-earnings ratio. The book value per share of common stock.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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Lydex Company’s financial statements for the last two years are as follows:
Lydex Company | ||
Comparative Balance Sheet | ||
This Year | Last Year | |
---|---|---|
Assets | ||
Current assets: | ||
Cash | $ 1,020,000 | $ 1,260,000 |
Marketable securities | 0 | 300,000 |
Accounts receivable, net | 2,940,000 | 2,040,000 |
Inventory | 3,660,000 | 2,100,000 |
Prepaid expenses | 270,000 | 210,000 |
Total current assets | 7,890,000 | 5,910,000 |
Plant and equipment, net | 9,640,000 | 9,110,000 |
Total assets | $ 17,530,000 | $ 15,020,000 |
Liabilities and |
||
Liabilities: | ||
Current liabilities | $ 4,070,000 | $ 3,100,000 |
Note payable, 10% | 3,700,000 | 3,100,000 |
Total liabilities | 7,770,000 | 6,200,000 |
Stockholders' equity: | ||
Common stock, $75 par value | 7,500,000 | 7,500,000 |
2,260,000 | 1,320,000 | |
Total stockholders' equity | 9,760,000 | 8,820,000 |
Total liabilities and stockholders' equity | $ 17,530,000 | $ 15,020,000 |
Lydex Company | ||
Comparative Income Statement and Reconciliation | ||
This Year | Last Year | |
---|---|---|
Sales (all on account) | $ 15,920,000 | $ 14,180,000 |
Cost of goods sold | 12,736,000 | 10,635,000 |
Gross margin | 3,184,000 | 3,545,000 |
Selling and administrative expenses | 1,014,000 | 1,628,000 |
Net operating income | 2,170,000 | 1,917,000 |
Interest expense | 370,000 | 310,000 |
Net income before taxes | 1,800,000 | 1,607,000 |
Income taxes (30%) | 540,000 | 482,100 |
Net income | 1,260,000 | 1,124,900 |
Common dividends | 320,000 | 562,450 |
Net income retained | 940,000 | 562,450 |
Beginning retained earnings | 1,320,000 | 757,550 |
Ending retained earnings | $ 2,260,000 | $ 1,320,000 |
The following financial data and ratios are typical of companies in Lydex Company’s industry:
2.3 | ||
Acid-test ratio | 1.1 | |
Average collection period | 32 | days |
Average sale period | 60 | days |
Return on assets | 9.9% | |
Debt-to-equity ratio | 0.7 | |
Times interest earned ratio | 5.9 | |
Price-earnings ratio | 10 |
To assess the company’s stock market performance, compute the following for this year and last year. Assume Lydex’s stock price at the end of this year and last year was $106 and $74, respectively.
- The earnings per share.
- The dividend yield ratio.
- The dividend payout ratio.
- The price-earnings ratio.
- The book value per share of common stock.
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