The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.) 2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 8,800 Dividends 3,100 Earnings per share 4.40 Hi-Tech Instruments, Inc. Balance Sheet (Thousands of Dollars) Dec. 31, 2016 Dec. 31, 2015 Assets Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets $172,000 $167,000 Liabilities and Stockholders' Equity Notes payable-banks $6,000 $6,000 Accounts payable 22,500 18,700 Accrued liabilities 16,500 21,000 Total current liabilities 45,000 45,700 9% Bonds payable 40,000 40,000 Total liabilities 85,000 85,700 Common stock, $25 par value (2,000,000 shares) 50,000 50,000 Retained earnings 37,000 31,300 Total stockholders' equity 87,000 81,300 Total liabilities and stockholders' equity $172,000 $167,000 Calculate the company's dividends paid per share of common stock for 2016. Round answer to two decimal places. $Answer What is the dividend payout ratio? Round answer to one decimal place. Ex: 0.2345 = 23.5%
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Dividends per Share
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)
| 2016 | |
|---|---|
| Sales revenue | $210,000 |
| Cost of goods sold | 125,000 |
| Net income | 8,800 |
| Dividends | 3,100 |
| Earnings per share | 4.40 |
| Hi-Tech Instruments, Inc. Balance Sheet |
||
|---|---|---|
|
(Thousands of Dollars) |
Dec. 31, 2016 | Dec. 31, 2015 |
| Assets | ||
| Cash | $18,300 | $18,000 |
| 46,000 | 41,000 | |
| Inventory | 39,500 | 43,700 |
| Total current assets | 103,800 | 102,700 |
| Plant assets (net) | 52,600 | 50,500 |
| Other assets | 15,600 | 13,800 |
| Total assets | $172,000 | $167,000 |
| Liabilities and |
||
| Notes payable-banks | $6,000 | $6,000 |
| Accounts payable | 22,500 | 18,700 |
| Accrued liabilities | 16,500 | 21,000 |
| Total current liabilities | 45,000 | 45,700 |
| 9% Bonds payable | 40,000 | 40,000 |
| Total liabilities | 85,000 | 85,700 |
| Common stock, $25 par value (2,000,000 shares) | 50,000 | 50,000 |
| 37,000 | 31,300 | |
| Total stockholders' equity | 87,000 | 81,300 |
| Total liabilities and stockholders' equity | $172,000 | $167,000 |
Round answer to two decimal places.
$Answer
What is the dividend payout ratio?
Round answer to one decimal place. Ex: 0.2345 = 23.5%
Answer
%
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