Question

The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 6,500 Accounts receivable, net 35,000 Merchandise inventory 70,000 Prepaid expenses 3,50

The financial statements for Castile Products, Inc., are given below:

 

Castile Products, Inc.
Balance Sheet
December 31
Assets





Current assets:





Cash$6,500



Accounts receivable, net
35,000



Merchandise inventory
70,000



Prepaid expenses
3,500



Total current assets
115,000



Property and equipment, net
185,000



Total assets$300,000



Liabilities and Stockholders' Equity



Liabilities:





Current liabilities$50,000



Bonds payable, 10%
80,000



Total liabilities
130,000



Stockholders’ equity:





Common stock, $5 per value
30,000



Retained earnings
140,000



Total stockholders’ equity
170,000



Total liabilities and stockholders’ equity$300,000




 

Castile Products, Inc.
Income Statement
For the Year Ended December 31
Sales$420,000
Cost of goods sold
292,500
Gross margin
127,500
Selling and administrative expenses
89,500
Net operating income
38,000
Interest expense
8,000
Net income before taxes
30,000
Income taxes (30%)
9,000
Net income$21,000

 

Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.

 

Assume that Castile Products, Inc., paid dividends of $2.10 per share during the year. Also assume that the company’s common stock had a market price of $42 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

 

Required:

Compute financial ratios as follows:

 

1. Earnings per share. (Round your answer to 2 decimal places.)

2. Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage final answer to nearest whole number (i.e., 0.1234 should be entered as 12).)

3. Dividend yield ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage final answer to nearest whole number (i.e., 0.1234 should be entered as 12).)

4. Price-earnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)

5. Book value per share. (Round your answer to 2 decimal places.)


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The financial statements for Castile Products, Inc., are given below: Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash $ 6,500 Accounts receivable, net 35,000 Merchandise inventory 70,000 Prepaid expenses 3,50
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