Pecunious Products, Incorporated’s financial results for the past three years are summarized below: Year 3Year 2Year 1Sales trend128.0115.0100.0Current ratio2.52.32.2Acid-test ratio0.80.91.1Accounts receivable turnover9.410.612.5Inventory turnover6.57.28.0Dividend yield7.1%6.5%5.8%Dividend payout ratio40%50%60%Dividends paid per share*$ 1.50$ 1.50$ 1.50*There have been no changes in common stock outstanding over the three-year period. Required:Your boss has asked you to review these results and then answer the following questions: Is the earnings per share increasing or decreasing? Is the price-earning ratio going up or down? (pls expound)

Name: Pecunious Products, Incorporated’s financial results for the past thre
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Description: Pecunious Products, Incorporated’s financial results for the past three years are summarized below: Year 3Year 2Year 1Sales trend128.0115.0100.0Current ratio2.52.32.2Acid-test ratio0.80.91.1Accounts receivable turnover9.410.612.5Inventory turnover6.

Let EPS in year n be EPSn. Let price in year n be Pn. Dividends paid in all years (D) = $1.50…

Answered: Pecunious Products, Incorporated’s…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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Pecunious Products, Incorporated’s financial results for the past three years are summarized below:

	Year 3	Year 2	Year 1
Sales trend	128.0	115.0	100.0
Current ratio	2.5	2.3	2.2
Acid-test ratio	0.8	0.9	1.1
Accounts receivable turnover	9.4	10.6	12.5
Inventory turnover	6.5	7.2	8.0
Dividend yield	7.1%	6.5%	5.8%
Dividend payout ratio	40%	50%	60%
Dividends paid per share*	$ 1.50	$ 1.50	$ 1.50

*There have been no changes in common stock outstanding over the three-year period.

Required:

Your boss has asked you to review these results and then answer the following questions:

Is the earnings per share increasing or decreasing? Is the price-earning ratio going up or down? (pls expound)

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