The financial statements for Castile Products, Inc., are given below. Castile Products, Inc. Balance Sheet December 31 Assets Current assets: $ 22,000 230.000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses 360,000 10,000 Total current assets Property and equipment, net 622,000 810,000 Total assets $1,432,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 260,000 380,000 Bonds payable, 9% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings 640,000 $ 130,000 662,000 Total stockholders' equity 792,000 Total liabilities and equity $1,432,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold $2,270,000 1,220,000 Gross margin Selling and administrative expenses 1,050,000 570,000 Net operating income Interest expense 480.000 34,200 Net income before taxes 445,800 Income taxes (30%) 133,740 Net income $ 312,060 Account balances at the beginning of the year were: accounts receivable, $200,000; and inventory, $330,000, All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.95 per share during the year. Also assume that the company's common stock had a market price of $66 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.
The financial statements for Castile Products, Inc., are given below. Castile Products, Inc. Balance Sheet December 31 Assets Current assets: $ 22,000 230.000 Cash Accounts receivable, net Merchandise inventory Prepaid expenses 360,000 10,000 Total current assets Property and equipment, net 622,000 810,000 Total assets $1,432,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 260,000 380,000 Bonds payable, 9% Total liabilities Stockholders' equity: Common stock, $10 par value Retained earnings 640,000 $ 130,000 662,000 Total stockholders' equity 792,000 Total liabilities and equity $1,432,000 Castile Products, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold $2,270,000 1,220,000 Gross margin Selling and administrative expenses 1,050,000 570,000 Net operating income Interest expense 480.000 34,200 Net income before taxes 445,800 Income taxes (30%) 133,740 Net income $ 312,060 Account balances at the beginning of the year were: accounts receivable, $200,000; and inventory, $330,000, All sales were on account. Assume that Castile Products, Inc., paid dividends of $3.95 per share during the year. Also assume that the company's common stock had a market price of $66 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please answer questions 4 and 5
Transcribed Image Text:The financial statements for Castile Products, Inc., are given below:
Castile Products, Inc.
Balance Sheet
December 31
Assets
Current assets:
Cash
Accounts receivable, net
Merchandise inventory
Prepaid expenses
$ 22,000
230,000
360,000
10,000
Total current assets
Property and equipment, net
622,000
810,000
Total assets
$1,432,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities
$ 260,000
Bonds payable, 9%
380,000
Total liabilities
Stockholders' equity:
Common stock, $10 par value
Retained earnings
640.000
$ 130,000
662,000
Total stockholders' equity
792,000
Total liabilities and equity
$1,432,000
Castile Products, Inc.
Income Statement
For the Year Ended December 31
Sales
Cost of goods sold
$2,270,000
1,220,000
Gross margin
Selling and administrative expenses
1,050,000
570,000
Net operating income
Interest expense
480,000
34,200
Net income before taxes
445,800
133,740
Income taxes (30%)
Net income
$ 312,060
Account balances at the beginning of the year were: accounts receivable, $200,000; and inventory.
$330,000. All sales were on account.
Assume that Castile Products, Inc., paid dividends of $3.95 per share during the year. Also assume that the
company's common stock had a market price of $66 at the end of the year and there was no change in the
number of outstanding shares of common stock during the year.
Transcribed Image Text:Required:
Compute financial ratios as follows:
1. Earnings per share. (Round your answer to 2 decimal places.)
Earnings per share
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%).)
Dividend payout ratio
%
3. Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be
considered as 12.3%).)
Dividend yield ratio
%
4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer
to 1 decimal place.)
Price-earnings ratio
5. Book value per share. (Round your answer to 2 decimal places.)
Book value per share
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