The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets:
The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc. Balance Sheet December 31 |
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Assets | ||
Current assets: | ||
Cash | $ | 6,500 |
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 |
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Liabilities: | ||
Current liabilities | $ | 50,000 |
Bonds payable, 10% | 80,000 | |
Total liabilities | 130,000 | |
Stockholders’ equity: | ||
Common stock, $5 per value | 30,000 | |
140,000 | ||
Total stockholders’ equity | 170,000 | |
Total liabilities and stockholders’ equity | $ | 300,000 |
Castile Products, Inc. Income Statement For the Year Ended December 31 |
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Sales | $ | 420,000 |
Cost of goods sold | 292,500 | |
Gross margin | 127,500 | |
Selling and administrative 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: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.
Assume that Castile Products, Inc., paid dividends of $2.10 per share during the year. Also assume that the company’s common stock had a market price of $42 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 nearest whole number (i.e., 0.1234 should be entered as 12).)
3. Dividend yield ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage final answer to nearest whole number (i.e., 0.1234 should be entered as 12).)
4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)
5. Book value per share. (Round your answer to 2 decimal places.)
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