Question

HIROOLE LTD. Statement of Financial Position December 31 (in thousands) 2018 2017 2016 Assets Current assets Cash $30 $81 $200 Accounts receivable 907 698 504 Inventory 1,190 794 497 Total current assets 2,127 1,573 1,201 Property, plant, and equipment (net) 4,105 3,831 3,230 Total assets $6,232 $5,404 $4,431 Liabilities and Shareholders' Equity Liabilities Current liabilities $596 $553 $499 Non-current liabilities 3,047 2,303 1,508 Total liabilities 3,643 2,856 2,007 Shareholders' equity Common shares 999999999 Retained earnings 1,590 1,549 1,425 Total shareholders' equity 2,589 2,548 2,424 Total liabilities and shareholders' equity $6,232 $5,404 $4,431 HIROOLE LTD. Income Statement Year Ended December 31 (in thousands) 2018 2017 2016 Sales (all on credit) $4,533 $3,963 $3,581 Cost of goods sold 2,508 2,116 1,787 Gross profit 2,025 1,847 1,794 Operating expenses 1,447 1.472 1.489 Income from operations 578 375 Interest expense 191 Income before income tax 387 246 234 Income tax expense 62 59 Net income $290 $184 $175 305 129 71 97

Answer 1

	2016	2017	2018
Beginning retained earnings	$   1,400	$   1,425	$ 1,549
Add: Net income	$      175	$      184	$      290
Less: Ending retained earnings	$ -1,425	$ -1,549	$ -1,590
Dividends declared	$      150	$         60	$      249

	2016	2017	2018
Dividends	$      150	$         60	$ 249
Net income	$      175	$      184	$      290
Dividend payout ratio	85.7%	32.6%	85.9%

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