Round all answers to two decimal places except for dividend payout ratio which is rounded to four decimal places.1. Compute the following:a. Return on sales17.85%b. Return on assets8.71%c. Return on stockholders' equity18.45%d. Earnings per share0.29e. Price-earnings ratiof. Dividend yield%g. Dividend payout ratio2. CONCEPTUAL CONNECTION: Assume you are considering an investment to provide retirement income. Based on the above,which would be of particular interest to you?Since all the ratios are profitabilityratios, they should all be of interest to investors. Some, however, may be of moreinterest than others depending on the objectives of the potential investor. For an investor looking for an investment to provideretirement income, the price-earnings ratiowould be of particular interest. Profitability AnalysisAlbion Inc. provided the following information for its most recent year of operations. The tax rate is 40%.Sales$100,000Cost of goods sold45,000Net income10,500Interest expense350Assets-beginning balance120,000Assets-ending balance126,000Preferred dividends$300Common dividends (paid December 31)$8,000Common shares outstanding-January 130,000 sharesCommon shares outstanding-December 3140,000 sharesAverage common stockholders' equity$55,000Market price per common share$12

Name: Round all answers to two decimal places except for dividend payout ra
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Description: Round all answers to two decimal places except for dividend payout ratio which is rounded to four decimal places.1. Compute the following:a. Return on sales17.85%b. Return on assets8.71%c. Return on stockholders' equity18.45%d. Earnings per share0.2

Price Earnings Ratio: This is also known as P/E ratio. This ratio basically depicts the capability…

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Profitability Analysis Albion Inc. provided the following information for its most recent year of operations. The tax rate is 40%. Sales $100,000 Cost of goods sold 45,000 Net income 10,500 Interest expense 350 Assets-beginning balance 120,000 Assets-ending balance 126,000 Preferred dividends $300 Common dividends (paid December 31) $8,000 Common shares outstanding-January 1 30,000 shares Common shares outstanding-December 31 40,000 shares Average common stockholders' equity $55,000 Market price per common share $12

Profitability Analysis Albion Inc. provided the following information for its most recent year of operations. The tax rate is 40%. Sales $100,000 Cost of goods sold 45,000 Net income 10,500 Interest expense 350 Assets-beginning balance 120,000 Assets-ending balance 126,000 Preferred dividends $300 Common dividends (paid December 31) $8,000 Common shares outstanding-January 1 30,000 shares Common shares outstanding-December 31 40,000 shares Average common stockholders' equity $55,000 Market price per common share $12

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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