Question

Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $590,000 long-term loan from Gulfport State Bank, $145,000 of which will be used to bolster the Cash account and $445,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year $ 104,000 0 594,000 1,035,000 26,000 1,759,000 1,751,000 $ 3,510,000 $ 240,000 27,000 390,000 685,000 31,000 1,373,000 1,420,000 $ 2,793,000 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 Bonds payable, 12% Total liabilities Stockholders' equity: Common stock, $15 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ $ 845,000 700,000 1,545,000 520,000 700,000 1,220,000 780,000 1,185,000 1,965,000 $ 3,510,000 780,000 793,000 1,573,000 $ 2,793,000

Answer 1

Earning per share = Net Income / Common Stock outstanding
Last Year = $301000/52000 = $5.79 per share
This Year = $511000/52000 = $9.83 per share
Common Stock outstanding = $780000/15 = 52000

Dividend Yield Ratio = Dividend per share / Market price
Last year = $1.88 / $55 = 3.43%
Dividend per share = $98000/52000 = $1.88
This year = $2.29 / $60 = 3.81%
Dividend per share = $119000/52000 = $2.29

Dividend payout ratio = Dividend paid / Net Income
Last year = $98000/ 301000 = 32.56%
This year = $119000/ 511000 = 23.29%

Price earning ratio = Market price / EPS
Last year = $55 / 5.79 = 9.50
This year = $60 / 9.83 = 6.10

Book Value per share = Total Stockholders Equity / Common stock outstanding
Last year = $1573000 / 52000 = $30.25 per share
This year = $1965000 / 52000 = $37.79 per share

As per HOMEWORKLIB RULES we are suppose to answer 4 parts, i have answered 5, so kindly post others separately