Enough information isn't provided to complete this homework, super frustrating I don't feel my EPS answer is correc base on data below.Profitability RatiosMike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.Kepler CompanyComparative Balance Sheets This Year Last Year AssetsCurrent assets:Cash $ 50,000 $100,000 Accounts receivable, net300,000 150,000 Inventory600,000 400,000 Prepaid expenses25,000 30,000 Total current assets$ 975,000 $680,000 Property and equipment, net125,000 150,000 Total assets$1,100,000 $830,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$ 400,000 $290,000 Short-term notes payable200,000 60,000 Total current liabilities$ 600,000 $350,000 Long-term bonds payable, 12%100,000 150,000 Total liabilities$ 700,000 $500,000 Stockholders' equity: Common stock (100,000 shares)200,000 200,000 Retained earnings200,000 130,000 Total liabilities and stockholders' equity$1,100,000 $830,000 Kepler CompanyComparative Income Statements This Year Last Year Sales $ 950,000 $ 900,000 Less: Cost of goods sold500,000 490,000 Gross margin$ 450,000 $ 410,000 Less: Selling and administrative expenses275,000 260,000 Operating income$ 175,000 $ 150,000 Less: Interest expense12,000 18,000 Income before taxes$ 163,000 $ 132,000 Less: Income taxes65,200 52,800 Net income$ 97,800 $ 79,200 Less: Dividends (common)27,800 19,200 Net income, retained$ 70,000 $ 60,000 Also, assume that for last year and for the current year, the market price per share of common stock is $2.98. In addition, for last year, assets and equity were the same at the beginning and end of the year.Required:Note: Round all answers to two decimal places.1. Compute the following for each year: This Year Last Year a. Return on assetsfill in the blank 1%fill in the blank 2%b. Return on stockholders' equityfill in the blank 3%fill in the blank 4%c. Earnings per share$fill in the blank 5 $fill in the blank 6 d. Price-earnings ratiofill in the blank 7 fill in the blank 8 e. Dividend yieldfill in the blank 9%fill in the blank 10%f. Dividend payout ratiofill in the blank 11 fill in the blank 12

a. Return on Assets = Net Income / Average Total Assets b. Return on Stockholders' Equity = Net…

Answered: Required: Note: Round all answers to…

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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Enough information isn't provided to complete this homework, super frustrating I don't feel my EPS answer is correc base on data below.

Profitability Ratios

Mike Sanders is considering the purchase of Kepler Company, a firm specializing in the manufacture of office supplies. To be able to assess the financial capabilities of the company, Mike has been given the company's financial statements for the 2 most recent years.

Kepler Company
Comparative Balance Sheets
		This Year	Last Year
Assets
Current assets:
Cash		$ 50,000	$100,000
Accounts receivable, net	300,000	150,000
Inventory	600,000	400,000
Prepaid expenses	25,000	30,000
Total current assets	$ 975,000	$680,000
Property and equipment, net	125,000	150,000
Total assets	$1,100,000	$830,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 400,000	$290,000
Short-term notes payable	200,000	60,000
Total current liabilities	$ 600,000	$350,000
Long-term bonds payable, 12%	100,000	150,000
Total liabilities	$ 700,000	$500,000
Stockholders' equity:
Common stock (100,000 shares)	200,000	200,000
Retained earnings	200,000	130,000
Total liabilities and stockholders' equity	$1,100,000	$830,000

Kepler Company
Comparative Income Statements
		This Year	Last Year
Sales		$ 950,000	$ 900,000
Less: Cost of goods sold	500,000	490,000
Gross margin	$ 450,000	$ 410,000
Less: Selling and administrative expenses	275,000	260,000
Operating income	$ 175,000	$ 150,000
Less: Interest expense	12,000	18,000
Income before taxes	$ 163,000	$ 132,000
Less: Income taxes	65,200	52,800
Net income	$ 97,800	$ 79,200
Less: Dividends (common)	27,800	19,200
Net income, retained	$ 70,000	$ 60,000

Also, assume that for last year and for the current year, the market price per share of common stock is $2.98. In addition, for last year, assets and equity were the same at the beginning and end of the year.

Required:

Note: Round all answers to two decimal places.

1. Compute the following for each year:

	This Year		Last Year
a. Return on assets	fill in the blank 1	%	fill in the blank 2	%
b. Return on stockholders' equity	fill in the blank 3	%	fill in the blank 4	%
c. Earnings per share	$fill in the blank 5		$fill in the blank 6
d. Price-earnings ratio	fill in the blank 7		fill in the blank 8
e. Dividend yield	fill in the blank 9	%	fill in the blank 10	%
f. Dividend payout ratio	fill in the blank 11		fill in the blank 12

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