Refer to the financial statements for Castile Products, Inc., in Exercise 158. In addition to the data
Question:
Refer to the financial statements for Castile Products, Inc., in Exercise 15–8. In addition to the data in these statements, 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.
The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31
Assets
Current assets:
Cash ……………………………………………………...................... $ 6,500
Accounts receivable, net ………………………….……............ 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 Stockholders’ Equity
Liabilities:
Current liabilities ………………………………………............. $ 50,000
Bonds payable, 10% ………………………………..……............ 80,000
Total liabilities ……………………………………….…............... 130,000
Stockholders’ equity:
Common stock, $5 per value ……………………………......... 30,000
Retained earnings ………………………………………............. 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
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
Required:
Compute financial ratios as follows:
1. Earnings per share.
2. Dividend payout ratio.
3. Dividend yield ratio.
4. Price-earnings ratio.
5. Book value per share.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Financial Ratios
The term is enough to curl one's hair, conjuring up those complex problems we encountered in high school math that left many of us babbling and frustrated. But when it comes to investing, that need not be the case. In fact, there are ratios that,...
Step by Step Answer:
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer