80,000 80,000 20,000 18,000 20,000 30,000 122,000 158,000 8,000 12,000 500,000 450,000 100,000 100,000 200,000 200,000
80,000 80,000 20,000 18,000 20,000 30,000 122,000 158,000 8,000 12,000 500,000 450,000 100,000 100,000 200,000 200,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS
The following are the balance sheet and income statement data of PRT Company:
December 31
Balance Sheet Accounts
1997
1998
Cash
P30,000
P52,000
Marketable Securities
170,000
200,000
Accounts Receivable, net
100,000
200,000
Inventories
150,000
100,000
Machinery and Equipment, net
340,000
300,000
110,000
100,000
Land and Building, net
Goodwill
80,000
80,000
Deferred Charges
20,000
18,000
Notes Payable, Trade
20,000
30,000
122,000
158,000
Accounts Payable, Trade
Expenses Payable
12,000
8,000
500,000
Long-term Notes-Due 2008
450,000
100,000
100,000
15% Preferred Stock, P100 par
Common Stock, P10 par
Retained Earnings
200,000
200,000
50,000
100,000
1998 Income Statement Accounts
Sales
P1,050,000
Sales Returns and Allowances
50,000
100,000
Inventory, December 31, 1998
Inventory, December 31, 1997
150,000
Purchases
550,000
Selling Expenses
80,000
120,000
Administrative Expenses (including depreciation of P25,000)
Interest on Long-term Notes
50,000
Income Taxes, 35%
52,500
Additional Information:
1. Dividends paid on preferred stock
15,000
32,500
2. Dividends paid on common stock
3. Market price per share of common stock
18
7. Evaluate the firm's profitability for 1998 by computing:
a. Return on Common Stockholder's Equity
b. Earnings Per Share (EPS)
c. Price-earnings Ratio
d. Pay-out Ratio to Common Shares
e. Dividend Yield Per Share on Common Stock
7](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F58a53162-b1cb-487d-a869-0ab2c8eadd5e%2F90e67c7d-373f-4aa6-9e0d-a126c5449231%2Foe15fed_processed.png&w=3840&q=75)
Transcribed Image Text:FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS
The following are the balance sheet and income statement data of PRT Company:
December 31
Balance Sheet Accounts
1997
1998
Cash
P30,000
P52,000
Marketable Securities
170,000
200,000
Accounts Receivable, net
100,000
200,000
Inventories
150,000
100,000
Machinery and Equipment, net
340,000
300,000
110,000
100,000
Land and Building, net
Goodwill
80,000
80,000
Deferred Charges
20,000
18,000
Notes Payable, Trade
20,000
30,000
122,000
158,000
Accounts Payable, Trade
Expenses Payable
12,000
8,000
500,000
Long-term Notes-Due 2008
450,000
100,000
100,000
15% Preferred Stock, P100 par
Common Stock, P10 par
Retained Earnings
200,000
200,000
50,000
100,000
1998 Income Statement Accounts
Sales
P1,050,000
Sales Returns and Allowances
50,000
100,000
Inventory, December 31, 1998
Inventory, December 31, 1997
150,000
Purchases
550,000
Selling Expenses
80,000
120,000
Administrative Expenses (including depreciation of P25,000)
Interest on Long-term Notes
50,000
Income Taxes, 35%
52,500
Additional Information:
1. Dividends paid on preferred stock
15,000
32,500
2. Dividends paid on common stock
3. Market price per share of common stock
18
7. Evaluate the firm's profitability for 1998 by computing:
a. Return on Common Stockholder's Equity
b. Earnings Per Share (EPS)
c. Price-earnings Ratio
d. Pay-out Ratio to Common Shares
e. Dividend Yield Per Share on Common Stock
7
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