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Ratios Compared with Industry Averages Packard Plastics, Inc., manufactures various plastic and synthetic products. Financial statement data for the firm follow: 2013 (Thousands of Dollars, Except Earnings per Share) Sales revenue $815,000 Cost of goods sold 540,000 Net income 50,500 Dividends 14,000 Earnings per share 4.04 Packard Plastics, inc. Balance Sheets (Thousands of Dollars) Dec. 31, 2013 Dec. 31, 2012 Assets Cash 54,100 $2,700 Accounts receivable (net) 66.900 60,900 Inventory 148,000 140,000 Total Current Assets 219,000 203,600 Plant assets (net) 215,000 194,000 Other assets 5.300 3,900 Total Assets $439.300 $401,500 Liabilities and Stockholders' Equity Notes payable-banks 531,000 $25.000 Accounts payable 27,600 23,000 Accrued liabilities 25.100 24,800 Total Current Liabilities 83,700 72,800 10% Bonds payable 150,000 150,000 Total Liabilities 233,700 222,800 Common stock, $10 par value (12,500.000 shares) 125.000 125,000 Retained earnings 80,600 53,700 Total Stockholders' Equity 205,600 178,700 Total Liabilities and Stockholders Equity $439,300 $401,500

Ratios Compared with Industry Averages Packard Plastics, Inc., manufactures various plastic and synthetic products. Financial statement data for the firm follow: 2013 (Thousands of Dollars, Except Earnings per Share) Sales revenue $815,000 Cost of goods sold 540,000 Net income 50,500 Dividends 14,000 Earnings per share 4.04 Packard Plastics, inc. Balance Sheets (Thousands of Dollars) Dec. 31, 2013 Dec. 31, 2012 Assets Cash 54,100 $2,700 Accounts receivable (net) 66.900 60,900 Inventory 148,000 140,000 Total Current Assets 219,000 203,600 Plant assets (net) 215,000 194,000 Other assets 5.300 3,900 Total Assets $439.300 $401,500 Liabilities and Stockholders' Equity Notes payable-banks 531,000 $25.000 Accounts payable 27,600 23,000 Accrued liabilities 25.100 24,800 Total Current Liabilities 83,700 72,800 10% Bonds payable 150,000 150,000 Total Liabilities 233,700 222,800 Common stock, $10 par value (12,500.000 shares) 125.000 125,000 Retained earnings 80,600 53,700 Total Stockholders' Equity 205,600 178,700 Total Liabilities and Stockholders Equity $439,300 $401,500

FINANCIAL ACCOUNTING
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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### Ratios Compared with Industry Averages **Packard Plastics, Inc.**, manufactures various plastic and synthetic products. Financial statement data for the firm is as follows: #### 2013 Financial Summary (Thousands of Dollars, Except Earnings per Share) - **Sales revenue**: $815,000 - **Cost of goods sold**: $540,000 - **Net income**: $50,500 - **Dividends**: $14,000 - **Earnings per share**: $4.04 ### Packard Plastics, Inc. Balance Sheets (Thousands of Dollars) #### Assets | Account | Dec. 31, 2013 | Dec. 31, 2012 | |------------------------------------|---------------|---------------| | Cash | $4,100 | $2,700 | | Accounts receivable (net) | $66,900 | $60,900 | | Inventory | $148,000 | $140,000 | | **Total Current Assets** | $219,000 | $203,600 | | Plant assets (net) | $215,000 | $194,000 | | Other assets | $5,300 | $3,900 | | **Total Assets** | $439,300 | $401,500 | #### Liabilities and Stockholders' Equity | Account | Dec. 31, 2013 | Dec. 31, 2012 | |------------------------------------------|---------------|---------------| | Notes payable—banks | $31,000 | $25,000 | | Accounts payable | $27,600 | $23,000 | | Accrued liabilities | $25,100 | $24,800 | | **Total Current Liabilities** | $83,700 | $72,800 | | 10% Bonds payable | $150,000 | $150,000 | | **Total Liabilities** | $233,700 | $222,800 | | Common stock, $10 par value (12,500,000 shares) | $125,000 | $125,000 | | Retained earnings | $80,600 | $53,700 | | **Total Stockholders' Equity** | $205
Transcribed Image Text:### Ratios Compared with Industry Averages **Packard Plastics, Inc.**, manufactures various plastic and synthetic products. Financial statement data for the firm is as follows: #### 2013 Financial Summary (Thousands of Dollars, Except Earnings per Share) - **Sales revenue**: $815,000 - **Cost of goods sold**: $540,000 - **Net income**: $50,500 - **Dividends**: $14,000 - **Earnings per share**: $4.04 ### Packard Plastics, Inc. Balance Sheets (Thousands of Dollars) #### Assets | Account | Dec. 31, 2013 | Dec. 31, 2012 | |------------------------------------|---------------|---------------| | Cash | $4,100 | $2,700 | | Accounts receivable (net) | $66,900 | $60,900 | | Inventory | $148,000 | $140,000 | | **Total Current Assets** | $219,000 | $203,600 | | Plant assets (net) | $215,000 | $194,000 | | Other assets | $5,300 | $3,900 | | **Total Assets** | $439,300 | $401,500 | #### Liabilities and Stockholders' Equity | Account | Dec. 31, 2013 | Dec. 31, 2012 | |------------------------------------------|---------------|---------------| | Notes payable—banks | $31,000 | $25,000 | | Accounts payable | $27,600 | $23,000 | | Accrued liabilities | $25,100 | $24,800 | | **Total Current Liabilities** | $83,700 | $72,800 | | 10% Bonds payable | $150,000 | $150,000 | | **Total Liabilities** | $233,700 | $222,800 | | Common stock, $10 par value (12,500,000 shares) | $125,000 | $125,000 | | Retained earnings | $80,600 | $53,700 | | **Total Stockholders' Equity** | $205
### Required Using the given data, calculate items 1 through 8 below for 2013 for Packard Plastics, Inc. Round all answers to **two decimal places**. #### Table: Financial Ratios | Metric | Median Ratios for Manufacturers of Plastic and Synthetic Products | Ratios for Packard Plastics | |---------------------------------------|-----------------------------------------------------------------|-----------------------------| | **1. Quick ratio** | 1.20 | | | **2. Current ratio** | 1.90 | | | **3. Accounts Receivable Turnover** | 7.60 | | | **4. Inventory turnover** | 7.80 | | | **5. Debt-to-equity ratio** | 0.95 | | | **6. Gross profit percentage** | 32.70% | | | **7. Return on sales** | 3.50% | | | **8. Return on assets** | 6.30% | | #### Tasks **b. Calculate the dividends paid per share of common stock.** (Note: Number of shares shown on balance sheet is not shown in thousands. The number of shares "in thousands" is 12,500.) Round answers to **two decimal places**. - **Amount:** $____ **What was the dividend payout ratio?** - **Ratio:** _____% **c. If the most recent price per share of common stock is $47.75, what is the price-earnings ratio?** Round answers to **two decimal places**. - **P/E Ratio:** _____ **The dividend yield?** - **Yield:** _____%
Transcribed Image Text:### Required Using the given data, calculate items 1 through 8 below for 2013 for Packard Plastics, Inc. Round all answers to **two decimal places**. #### Table: Financial Ratios | Metric | Median Ratios for Manufacturers of Plastic and Synthetic Products | Ratios for Packard Plastics | |---------------------------------------|-----------------------------------------------------------------|-----------------------------| | **1. Quick ratio** | 1.20 | | | **2. Current ratio** | 1.90 | | | **3. Accounts Receivable Turnover** | 7.60 | | | **4. Inventory turnover** | 7.80 | | | **5. Debt-to-equity ratio** | 0.95 | | | **6. Gross profit percentage** | 32.70% | | | **7. Return on sales** | 3.50% | | | **8. Return on assets** | 6.30% | | #### Tasks **b. Calculate the dividends paid per share of common stock.** (Note: Number of shares shown on balance sheet is not shown in thousands. The number of shares "in thousands" is 12,500.) Round answers to **two decimal places**. - **Amount:** $____ **What was the dividend payout ratio?** - **Ratio:** _____% **c. If the most recent price per share of common stock is $47.75, what is the price-earnings ratio?** Round answers to **two decimal places**. - **P/E Ratio:** _____ **The dividend yield?** - **Yield:** _____%
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