Question

1) earninggs per share for this year and last year

2) dividend yield ratio in % this and last year

3) dividend payout ratio in % this and last year

4) price earning ratio this and last year

5) book value per share of common stock this and last year

Comparative Balance Sheet This Year Last Year $ 960,000 2,700,000 3,600,000 • 260,000 7,520,000 9,520,000 $17,040,000 $ 1,200,000 300,000 1,800,000 2,000,000 200,000 5,500,000 9 ,050,000 $14,550,000 Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Note payable, 108 Total liabilities Stockholders' equity: Common stock, $75 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 4,010,000 3,660,000 7,670,000 $ 2,980,000 3,060,000 6,040,000 7,500,000 7,500,000 1,870,000 1,010,000 9,370,000 8,510,000 $17,040,000 - $14,550,000 Lydex Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 15,860,000 $ 13,580,000 Cost of goods sold 12,688,000 10,185,000 Gross margin 3,172,000 3,395,000 Selling and administrative expenses 1,006,000 1,604,000 Net operating income 2,166,000 1,791,000 Interest expense 366,000 306,000 Net income before taxes 1,800,000 1.485.000 Income taxes (30%) 540,000 445,500 Net income 1,260,000 1,039,500 Common dividends 400,000 519,750 Net income retained 860,000 519,750 Beginning retained earnings 1,010,000 490,250 Ending retained earnings $ 1,870,000 $ 1,010,000 Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio 2.4 1.1 40 days 60 days 9.3% 0.7 5.9 10

Answer 1

1) Earnings per share	This year	Last year
Net Income	$1,260,000	$1,039,500
Less: Preferred Dividends	$0	$0
Earnings available to common stockholders (a)	$1,260,000	$1,039,500
Weighted average common shares ($7,500,000/$75 = 100,000/2) (b)	50,000	50,000
Earnings per share (a/b)	$25.20	$20.79
2) Dividend Yield Ratio	This year	Last year
Dividends per share ($400,000/100,000 shares); ($519,750/100,000 shares) (a)	$4	$5.20
Share price per share (b)	$75	$75
Dividend yield ratio (a/b)	5%	7%
3) Dividend payout ratio	This year	Last year
Dividends per share ($400,000/100,000 shares); ($519,750/100,000 shares) (a)	$4	$5.20
Earnings per share (b)	$25.20	$20.79
Dividend payout ratio (a/b)	16%	25%
4) Price earning ratio	This year	Last year
Market value per share (a)
Earnings per share (b)	$25.20	$20.79
Price earnings ratio (a/b)
Note: Market value per share is not given, hence, please use the above formula to calculate the same. Please comment, if you get any queries, I will help.
5) Book value per share:	This year	Last year
Total stockholders' Equity (a)	$9,370,000	$8,510,000
Number of outstanding shares (b)	100,000	100,000
Book value per share (a/b)	$93.70	$85.10