Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2023 2022 2021 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before income taxes $645,179 $745,497 $660,302 Provision for income taxes (254,000) (290,000) (257,000) Net income $391,179 $455,497 $403,302 Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2023 Dec. 31, 2022 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700 803,707 Other 109,456 101,811 Total current assets $2,220,625 $1,784,130 Property and equipment, net 1,666,588 1,813,948 Other assets 247,892 248,372 Total assets $4,135,105 $3,846,450 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $250,363 $309,092 Accrued expenses 347,892 274,220 Other current liabilities 15,700 0 Income taxes 93,489 137,466 Total current liabilities $707,444 $720,778 Long-term debt 650,000 541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities $1,693,812 $1,578,833 Stockholders' equity: Preferred stock $100,000 $100,000 Common stock 89,727 89,727 Additional paid-in capital—common stock 128,906 127,776 Retained earnings 2,397,112 2,136,794 $2,715,745 $2,454,297 Less: Treasury stock, at cost (274,452) (186,680) Total stockholders' equity $2,441,293 $2,267,617 Total liabilities and stockholders' equity $4,135,105 $3,846,450 Use the information provided above and below to respond to the following requirements. Year ended December 31 Item 2023 2022 Average number of common shares outstanding (thousands) 362,202 364,398 Preferred dividends (thousands) $24,000 $24,000 Dividends per common share 0.36 1.54 Common dividends (thousands) 130,861.00 561,172.30 Common stock repurchases 0 0 Market price per share: High 83.25 79.10 Low 63.25 59.00 Close 78.42 66.36 At January 1, 2022, total stockholders' equity was $2,083,122 and there was no preferred stock. Required: 1. Compute the earnings per share, return on common equity, dividend yield ratio, and dividend payout ratio (in percentage terms, rounded to two decimal places except for EPS, which should be rounded to nearest cent) for 2022 and 2023. 2023 2022 Earnings per share $fill in the blank 1 $fill in the blank 2 Return on common equity fill in the blank 3 % fill in the blank 4 % Dividend yield ratio fill in the blank 5 % fill in the blank 6 % Dividend payout ratio fill in the blank 7 % fill in the blank 8 % 2. Conceptual Connection: Indicate whether there were significant changes in these ratios between the years ended December 31, 2023, and December 31, 2022. Determine whether the stockholder ratios suggest that Steele was a better investment at December 31, 2023, or December 31, 2022

Stockholder Ratios Financial statements for Steele Inc. follow. Steele Inc. Consolidated Income Statements (in thousands except per share amounts) 2023 2022 2021 Net sales $7,245,088 $6,944,296 $6,149,218 Cost of goods sold (5,286,253) (4,953,556) (4,355,675) Gross margin $1,958,835 $1,990,740 $1,793,543 General and administrative expenses (1,259,896) (1,202,042) (1,080,843) Special and nonrecurring items 2,617 0 0 Operating income $701,556 $788,698 $712,700 Interest expense (63,685) (62,398) (63,927) Other income 7,308 10,080 11,529 Gain on sale of investments 0 9,117 0 Income before income taxes $645,179 $745,497 $660,302 Provision for income taxes (254,000) (290,000) (257,000) Net income $391,179 $455,497 $403,302 Steele Inc. Consolidated Balance Sheets (in thousands) ASSETS Dec. 31, 2023 Dec. 31, 2022 Current assets: Cash and equivalents $320,558 $41,235 Accounts receivable 1,056,911 837,377 Inventories 733,700 803,707 Other 109,456 101,811 Total current assets $2,220,625 $1,784,130 Property and equipment, net 1,666,588 1,813,948 Other assets 247,892 248,372 Total assets $4,135,105 $3,846,450 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $250,363 $309,092 Accrued expenses 347,892 274,220 Other current liabilities 15,700 0 Income taxes 93,489 137,466 Total current liabilities $707,444 $720,778 Long-term debt 650,000 541,639 Deferred income taxes 275,101 274,844 Other long-term liabilities 61,267 41,572 Total liabilities $1,693,812 $1,578,833 Stockholders' equity: Preferred stock $100,000 $100,000 Common stock 89,727 89,727 Additional paid-in capital—common stock 128,906 127,776 Retained earnings 2,397,112 2,136,794 $2,715,745 $2,454,297 Less: Treasury stock, at cost (274,452) (186,680) Total stockholders' equity $2,441,293 $2,267,617 Total liabilities and stockholders' equity $4,135,105 $3,846,450 Use the information provided above and below to respond to the following requirements. Year ended December 31 Item 2023 2022 Average number of common shares outstanding (thousands) 362,202 364,398 Preferred dividends (thousands) $24,000 $24,000 Dividends per common share 0.36 1.54 Common dividends (thousands) 130,861.00 561,172.30 Common stock repurchases 0 0 Market price per share: High 83.25 79.10 Low 63.25 59.00 Close 78.42 66.36 At January 1, 2022, total stockholders' equity was $2,083,122 and there was no preferred stock. Required: 1. Compute the earnings per share, return on common equity, dividend yield ratio, and dividend payout ratio (in percentage terms, rounded to two decimal places except for EPS, which should be rounded to nearest cent) for 2022 and 2023. 2023 2022 Earnings per share $fill in the blank 1 $fill in the blank 2 Return on common equity fill in the blank 3 % fill in the blank 4 % Dividend yield ratio fill in the blank 5 % fill in the blank 6 % Dividend payout ratio fill in the blank 7 % fill in the blank 8 % 2. Conceptual Connection: Indicate whether there were significant changes in these ratios between the years ended December 31, 2023, and December 31, 2022. Determine whether the stockholder ratios suggest that Steele was a better investment at December 31, 2023, or December 31, 2022

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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Question

Stockholder Ratios

Financial statements for Steele Inc. follow.

Steele Inc.
Consolidated Income Statements
(in thousands except per share amounts)
	2023	2022	2021
Net sales	$7,245,088		$6,944,296	$6,149,218
Cost of goods sold	(5,286,253)		(4,953,556)	(4,355,675)
Gross margin	$1,958,835		$1,990,740	$1,793,543
General and administrative expenses	(1,259,896)		(1,202,042)	(1,080,843)
Special and nonrecurring items	2,617		0	0
Operating income	$701,556		$788,698	$712,700
Interest expense	(63,685)		(62,398)	(63,927)
Other income	7,308		10,080	11,529
Gain on sale of investments	0		9,117	0
Income before income taxes	$645,179		$745,497	$660,302
Provision for income taxes	(254,000)		(290,000)	(257,000)
Net income	$391,179		$455,497	$403,302

Steele Inc.
Consolidated Balance Sheets
(in thousands)
ASSETS	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash and equivalents	$320,558		$41,235
Accounts receivable	1,056,911		837,377
Inventories	733,700		803,707
Other	109,456		101,811
Total current assets	$2,220,625		$1,784,130
Property and equipment, net	1,666,588		1,813,948
Other assets	247,892		248,372
Total assets	$4,135,105		$3,846,450
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$250,363		$309,092
Accrued expenses	347,892		274,220
Other current liabilities	15,700		0
Income taxes	93,489		137,466
Total current liabilities	$707,444		$720,778
Long-term debt	650,000		541,639
Deferred income taxes	275,101		274,844
Other long-term liabilities	61,267		41,572
Total liabilities	$1,693,812		$1,578,833
Stockholders' equity:
Preferred stock	$100,000		$100,000
Common stock	89,727		89,727
Additional paid-in capital—common stock	128,906		127,776
Retained earnings	2,397,112		2,136,794
	$2,715,745		$2,454,297
Less: Treasury stock, at cost	(274,452)		(186,680)
Total stockholders' equity	$2,441,293		$2,267,617
Total liabilities and stockholders' equity	$4,135,105		$3,846,450

Use the information provided above and below to respond to the following requirements.

	Year ended December 31
Item	2023	2022
Average number of common shares outstanding (thousands)	362,202	364,398
Preferred dividends (thousands)	$24,000	$24,000
Dividends per common share	0.36	1.54
Common dividends (thousands)	130,861.00	561,172.30
Common stock repurchases	0	0
Market price per share:
High	83.25	79.10
Low	63.25	59.00
Close	78.42	66.36

At January 1, 2022, total stockholders' equity was $2,083,122 and there was no preferred stock.

Required:

1. Compute the earnings per share, return on common equity, dividend yield ratio, and dividend payout ratio (in percentage terms, rounded to two decimal places except for EPS, which should be rounded to nearest cent) for 2022 and 2023.

	2023	2022
Earnings per share	$fill in the blank 1		$fill in the blank 2
Return on common equity	fill in the blank 3	%	fill in the blank 4	%
Dividend yield ratio	fill in the blank 5	%	fill in the blank 6	%
Dividend payout ratio	fill in the blank 7	%	fill in the blank 8	%

2. Conceptual Connection: Indicate whether there were significant changes in these ratios between the years ended December 31, 2023, and December 31, 2022.

Determine whether the stockholder ratios suggest that Steele was a better investment at December 31, 2023, or December 31, 2022

Expert Solution