Consecutive five-year balance sheets and income statements of Donna Szabo Corporation are shown below and on the following page.

  

Required

  

a. Compute or determine the following for the years 2007–2011:

  

1. Degree of financial leverage

  

2. Earnings per common share

  

3. Price/earnings ratio

  

4. Percentage of earnings retained

  

5. Dividend payout

  

6. Dividend yield

  

7. Book value per share

  

8. Materiality of options (use stock options outstanding)

  

b. Comment from the perspective of an investor.

    

Transcribed Image Text:

(Dollars in thousands) Assets Current assets: Cash Accounts receivable, net Inventories Total current assets Property, plant, and equipment, net Total assets DONNA SZABO CORPORATION BALANCE SHEETS December 31, 2007 through December 31, 2011 2011 2010 2009 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Income taxes Total current liabilities Long-term debt $ 26,000 $ 27,000 $ 29,000 128,000 125,000 126,000 140,000 143,000 145,000 291,000 296,000 302,000 2008 2007 $28,000 $ 27,000 130,000 128,000 146,000 144,000 304,000 299,000 420,000 418,000 417,000 418,000 415,000 $ 711,000 $714,000 $ 719,000 $722,000 $714,000 $ 120,000 $ 122,000 $122,500 $ 124,000 $125,000 12,000 13,000 13,000 12,000 132,000 135,000 137,000 90,000 65,000 69,000 13,500 136,000 137,000 67,000 68,000 (Dollars in thousands) Assets Current assets: Cash Accounts receivable, net Inventories Total current assets Property, plant, and equipment, net Total assets DONNA SZABO CORPORATION BALANCE SHEETS December 31, 2007 through December 31, 2011 2011 2010 2009 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Income taxes Total current liabilities Long-term debt $ 26,000 $ 27,000 $ 29,000 128,000 125,000 126,000 140,000 143,000 145,000 291,000 296,000 302,000 2008 2007 $28,000 $ 27,000 130,000 128,000 146,000 144,000 304,000 299,000 420,000 418,000 417,000 418,000 415,000 $ 711,000 $714,000 $ 719,000 $722,000 $714,000 $ 120,000 $ 122,000 $122,500 $ 124,000 $125,000 12,000 13,000 13,000 12,000 132,000 135,000 137,000 90,000 65,000 69,000 13,500 136,000 137,000 67,000 68,000

Answer rating: 100% (QA)

Solution Computation of the following Ratios a 1 Degree o... View the full answer