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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 | ||||
| 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 par value | $ | 30,000 | ||||
| Retained earnings | 140,000 | |||||
| Total stockholders’ equity | 170,000 | |||||
| Total liabilities and 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 | |
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Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account. |
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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 answer to nearest whole number.) |
| 3. | Dividend yield ratio. (Round your percentage answer to nearest whole number.) |
| 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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