The financial statements for Castile Products, Inc., are given below: Castile Products, Inc.Balance SheetDecember 31 Assets Current assets: Cash $ 23,000 Accounts receivable, net 250,000 Merchandise inventory 340,000 Prepaid expenses 8,000 Total current assets 621,000 Property and equipment, net 840,000 Total assets $ 1,461,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 290,000 Bonds payable, 11% 300,000 Total liabilities 590,000 Stockholders’ equity: Common stock, $10 par value $ 130,000 Retained earnings 741,000 Total stockholders’ equity 871,000 Total liabilities and equity $ 1,461,000 Castile Products, Inc.Income StatementFor the Year Ended December 31 Sales $ 2,140,000 Cost of goods sold 1,230,000 Gross margin 910,000 Selling and administrative expenses 600,000 Net operating income 310,000 Interest expense 33,000 Net income before taxes 277,000 Income taxes (30%) 83,100 Net income $ 193,900 Account balances at the beginning of the year were: accounts receivable, $240,000; and inventory, $260,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.65 per share during the year. Also assume that the company’s common stock had a market price of $71 at the end of the year and there was no change in the number of outstanding shares of common stock during the year. Required: Compute financial ratios as follows: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to1 decimal place.) 5. Book value per share. (Round your answer to 2 decimal places.)

The financial statements for Castile Products, Inc., are given below: Castile Products, Inc.Balance SheetDecember 31 Assets Current assets: Cash $ 23,000 Accounts receivable, net 250,000 Merchandise inventory 340,000 Prepaid expenses 8,000 Total current assets 621,000 Property and equipment, net 840,000 Total assets $ 1,461,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 290,000 Bonds payable, 11% 300,000 Total liabilities 590,000 Stockholders’ equity: Common stock, $10 par value $ 130,000 Retained earnings 741,000 Total stockholders’ equity 871,000 Total liabilities and equity $ 1,461,000 Castile Products, Inc.Income StatementFor the Year Ended December 31 Sales $ 2,140,000 Cost of goods sold 1,230,000 Gross margin 910,000 Selling and administrative expenses 600,000 Net operating income 310,000 Interest expense 33,000 Net income before taxes 277,000 Income taxes (30%) 83,100 Net income $ 193,900 Account balances at the beginning of the year were: accounts receivable, $240,000; and inventory, $260,000. All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.65 per share during the year. Also assume that the company’s common stock had a market price of $71 at the end of the year and there was no change in the number of outstanding shares of common stock during the year. Required: Compute financial ratios as follows: 1. Earnings per share. (Round your answer to 2 decimal places.) 2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).) 4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to1 decimal place.) 5. Book value per share. (Round your answer to 2 decimal places.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 17BEA: Ernst Companys balance sheet shows total liabilities of 32,500,000, total stockholders equity of...

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Question

The financial statements for Castile Products, Inc., are given below:

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash	$	23,000
Accounts receivable, net		250,000
Merchandise inventory		340,000
Prepaid expenses		8,000

Total current assets		621,000
Property and equipment, net		840,000

Total assets	$	1,461,000

Liabilities and Stockholders' Equity
Liabilities:
Current liabilities	$	290,000
Bonds payable, 11%		300,000

Total liabilities		590,000
Stockholders’ equity:
Common stock, $10 par value	$	130,000
Retained earnings		741,000

Total stockholders’ equity		871,000

Total liabilities and equity	$	1,461,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,140,000
Cost of goods sold		1,230,000

Gross margin		910,000
Selling and administrative expenses		600,000

Net operating income		310,000
Interest expense		33,000

Net income before taxes		277,000
Income taxes (30%)		83,100

Net income	$	193,900

Account balances at the beginning of the year were: accounts receivable, $240,000; and inventory, $260,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $3.65 per share during the year. Also assume that the company’s common stock had a market price of $71 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

Required:

Compute financial ratios as follows:

1.	Earnings per share. (Round your answer to 2 decimal places.)

2.	Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

3.	Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

4.	Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to1 decimal place.)

5.	Book value per share. (Round your answer to 2 decimal places.)

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