Lydex Company Comparative Balance Sheet |
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This Year | Last Year | |||
Assets | ||||
Current assets: | ||||
Cash | $ | 960,000 | $ | 1,200,000 |
Marketable securities | 0 | 300,000 | ||
Accounts receivable, net | 2,700,000 | 1,800,000 | ||
Inventory | 3,600,000 | 2,000,000 | ||
Prepaid expenses | 260,000 | 200,000 | ||
Total current assets | 7,520,000 | 5,500,000 | ||
Plant and equipment, net | 9,520,000 | 9,050,000 | ||
Total assets | $ | 17,040,000 | $ | 14,550,000 |
Liabilities and Stockholders' Equity | ||||
Liabilities: | ||||
Current liabilities | $ | 4,010,000 | $ | 2,980,000 |
Note payable, 10% | 3,660,000 | 3,060,000 | ||
Total liabilities | 7,670,000 | 6,040,000 | ||
Stockholders' equity: | ||||
Common stock, $75 par value | 7,500,000 | 7,500,000 | ||
Retained earnings | 1,870,000 | 1,010,000 | ||
Total stockholders' equity | 9,370,000 | 8,510,000 | ||
Total liabilities and stockholders' equity | $ | 17,040,000 | $ | 14,550,000 |
Lydex Company Comparative Income Statement and Reconciliation |
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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 |
To begin your assignment you gather the following financial data and ratios that are typical of companies in Lydex Company’s industry:
Current ratio | 2.4 | |
Acid-test ratio | 1.1 | |
Average collection period | 40 | days |
Average sale period | 60 | days |
Return on assets | 9.3 | % |
Debt-to-equity ratio | 0.7 | |
Times interest earned ratio | 5.9 | |
Price-earnings ratio | 10 | |
You decide next to assess the company’s stock market performance, Assume that Lydex’s stock price at the end of this year is $94 per share and that at the end of last year it was $62, For both this year and last year, compute: (Round your "Percentage" answers to 1 decimal place and other intermediate and final answers to 2 decimal places)
The earnings per share.
The dividend yield ratio.
The dividend payout ratio.
The price-earnings ratio.
The book value per share of common stock.
1. EPS = Income attributable to common stock holder/number of common stock
= 1,260,000/100000 = 12.60
2. DYR = Dividend per share/average market price per share
= 4/78 = 5.13%
3. DPOR = Dividend per share /EPS
= 4/12.60= 31.75%
4. PER = Average market price per share/EPS
= 78/12.60= 6.19
5. BVPS= Total book value attributable to common stock holder/number of common stock
= 9,370,000/100,000= 93.70
Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 960,000 $...
Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 960,000 $ 1,200,000 Marketable securities 0 300,000 Accounts receivable, net 2,700,000 1,800,000 Inventory 3,600,000 2,000,000 Prepaid expenses 260,000 200,000 Total current assets 7,520,000 5,500,000 Plant and equipment, net 9,520,000 9,050,000 Total assets $ 17,040,000 $ 14,550,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,010,000 $ 2,980,000 Note payable, 10% 3,660,000 3,060,000 Total liabilities 7,670,000 6,040,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained...
Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 960,000 $ 1,200,000 Marketable securities 0 300,000 Accounts receivable, net 2,700,000 1,800,000 Inventory 3,600,000 2,000,000 Prepaid expenses 260,000 200,000 Total current assets 7,520,000 5,500,000 Plant and equipment, net 9,520,000 9,050,000 Total assets $ 17,040,000 $ 14,550,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,010,000 $ 2,980,000 Note payable, 10% 3,660,000 3,060,000 Total liabilities 7,670,000 6,040,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained...
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