Matheny AG went public 3 years ago. The board of directors will be meeting shortly after the end of the year to decide on a dividend policy. In the past, growth has been financed primarily through the retention of earnings. A share or a cash dividend has never been declared. Presented below is a brief financial summary of Matheny AG operations (euros in thousands).

Instructions
a. Suggest factors to be considered by the board of directors in establishing a dividend policy.
b. Compute the return on assets, profit margin on sales, earnings per share, price-earnings ratio, and current ratio for each of the 5 years for Matheny AG.
c. Comment on the appropriateness of declaring a cash dividend of ‚¬0.20 per share at this time, using the ratios computed in part (b) as a major factor in your analysis.

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2018 2019 2017 2016 2015 Sales revenue €20,000 €16,000 €14,000 €6,000 €4,000 1,400 250 Net income 2,400 800 700 Average total assets 22,000 19,000 11,500 4,200 3,000 Current assets 8,000 6,000 3,000 1,200 1,000 1,200 Working capital 3,600 3,200 500 400 Ordinary shares: Number of shares 2,000 outstanding (in thousands) 2,000 2,000 20 20 €6 Average market price €9 €4