Question

Problem 13-03A Condensed balance sheet and income statement data for Marigold Corporation are presented here. MARIGOLD CORPORATION Balance Sheets December 31 2022 2021 Cash $ 32,000 $ 22,000 Accounts receivable (net) 52,000 47,000 Other current assets 95,000 100,000 Investments 60,000 75,000 Plant and equipment (net) 500,000 370,000 $739,000 $614,000 Current liabilities $ 87,000 $82,000 Long-term debt 150,000 90,000 Common stock, $10 par 325,000 315,000 Retained earnings 177,000 127,000 $739,000 $614,000 2020 $20,000 50,000 69,000 50,000 358,000 $547,000 $ 72,000 55,000 305,000 115,000 $547,000 MARIGOLD CORPORATION Income Statements For the Years Ended December 31 2022 Sales revenue $745,000 Less: Sales returns and allowances 42,000 Net sales 703,000 Cost of goods sold 430,000 Gross profit 273,000 Operating expenses (including income taxes) 182,000 Net income $ 91,000 2021 $605,000 32,000 573,000 355,000 218,000 152,000 $ 66,000 Additional information: 1. The market price of Marigold's common stock was $7.00, 57.50, and $8.50 for 2020, 2021, and 2022, respectively. 2. You must compute dividends paid. All dividends were paid in cash. Compute the following ratios for 2021 and 2022.

Answer 1

profit margin	(net income / net sales)*100
	2022 ($)	2021 ($)
net income	91000	66000
net sales	703000	573000
profit margin ratio	12.9%	11.5%
gross profit rate	(gross profit / net sales)*100
	2022 ($)	2021 ($)
gross profit	273000	218000
net sales	703000	573000
gross profit rate	38.8%	38.0%
asset turnover	net sales / average total assets
	2022 ($)	2021 ($)
net sales	703000	573000
beginning assets	614000	547000
ending assets	739000	614000
average total assets	676500	580500
asset turnover ratio	1.04	0.99	in times
earnings per share	(net income - preferred dividend)/no.of shares outstanding
	2022 ($)	2021 ($)
net income	91000	66000
preferred dividend	0	0
no.of shares outstanding	32500	31500
earnings per share ($)	2.80	2.10
price-earnings ratio	market value per share / earnings per share
	2022 ($)	2021 ($)
market value per share	8.5	7.5
earnings per share	2.8	2.1
price-earnings ratio	3.0	3.6	in times
calculation of dividend and dividend per share	2022 ($)	2021 ($)
beginning retained earnings	127000	115000
net profit for the year	91000	66000
less:ending retained earnings	-177000	-127000
dividend paid	41000	54000
no.of shares outstanding	32500	31500
dividend per share	1.26	1.71
payout ratio	dividend paid / net income
	2022 ($)	2021 ($)
dividend paid	41000	54000
net income	91000	66000
payout ratio	45%	82%
debt to assets ratio	total liabilities / total assets
	2022 ($)	2021 ($)
current liabilities	87000	82000
long-term debt	150000	90000
total liabilities	237000	172000
total assets	739000	614000
debt to assets ratio	32%	28%