In: Accounting
Hyrkas Corporation's most recent balance sheet and income statement appear below: |
Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) |
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Year 2 | Year 1 | |||
Asset: | ||||
Current assets: | ||||
Cash | $ | 100 | $ | 110 |
Accounts receivable | 210 | 220 | ||
Inventory | 110 | 120 | ||
Prepaid expenses | 10 | 10 | ||
Total current assets | 430 | 460 | ||
Plant and equipment, net | 900 | 880 | ||
Total assets | $ | 1,330 | $ | 1,340 |
Liabilities and stockholders' equity: | ||||
Current liabilities: | ||||
Accounts payable | $ | 160 | $ | 170 |
Accrued liabilities | 50 | 50 | ||
Notes payable, short term | 100 | 90 | ||
Total current liabilities | 310 | 310 | ||
Bonds payable | 190 | 240 | ||
Total liabilities | 500 | 550 | ||
Stockholders' equity: | ||||
Common stock, $1 par value | 100 | 100 | ||
Additional paid-in capital--common stock | 110 | 110 | ||
Retained earnings | 620 | 580 | ||
Total stockholders' equity | 830 | 790 | ||
Total liabilities and stockholders' equity | $ | 1,330 | $ | 1,340 |
Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) |
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Sales (all on account) | $ | 1,330 | |
Cost of goods sold | 850 | ||
Gross margin | 480 | ||
Selling and administrative expenses | 292 | ||
Net operating income | 188 | ||
Interest expense | 31 | ||
Net income before taxes | 157 | ||
Income taxes (30%) | 47 | ||
Net income | $ | 110 | |
Dividends on common stock during Year 2 totaled $50 thousand. The market price of common stock at the end of Year 2 was $9.36 per share. |
Required: | |
a. |
Compute the gross margin percentage for Year 2. (Round your answer to one decimal place. e.g. 0.1234 = 12.3%.) |
b. |
Compute the earnings per share (of common stock) for Year 2. (Round your answer to 2 decimal places.) |
c. |
Compute the price-earnings ratio for Year 2. (Do not round intermediate calculations. Round your answer to one decimal place.) |
d. |
Compute the dividend payout ratio for Year 2. (Do not round intermediate calculations. Round your answer to one decimal place. e.g. 0.1234 = 12.3%.) |
e. |
Compute the dividend yield ratio for Year 2. (Round your answer to 2 decimal places. e.g. 0.1234 = 12.34%.) |
f. |
Compute the return on total assets for Year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places. e.g. 0.1234 = 12.34%.) |
g. |
Compute the return on common stockholders' equity for Year 2. (Round your answer to 2 decimal places. e.g. 0.1234 = 12.34%.) |
h. |
Compute the book value per share for Year 2. (Round your answer to 2 decimal places.) |
i. |
Compute the working capital for Year 2. (Input your answer in thousands of dollars, e.g. $100,000 is 100.) |
j. |
Compute the current ratio for Year 2. (Round your answer to 2 decimal places.) |
k. | Compute the acid-test ratio for Year 2. (Round your answer to one decimal place.) |
l. | Compute the accounts receivable turnover for Year 2. (Round your answer to 2 decimal places.) |
m. |
Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.) |
n. |
Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places.) |
o. |
Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.) |
p. |
Compute the times interest earned for Year 2. (Round your answer to 2 decimal places.) |
q. |
Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places. e.g. 0.1234 = 0.12) |
Answer to Requirement a.
Gross Margin percentage = Gross Margin / Sales * 100
Gross Margin percentage = $480 / $1,330 * 100
Gross Margin percentage = 36.1%
Answer to Requirement b.
Earnings per Share = Net Income / Common Stock Outstanding
Common Stock Outstanding = $100 / $1
Common Stock Outstanding = 100
Earnings per Share = $110 / 100
Earnings per Share = $1.10
Answer to Requirement c.
Price- Earnings Ratio = Price per Share / Earnings per Share
Price- Earnings Ratio = $9.36 / $1.10
Price- Earnings Ratio = 8.5times
Answer to Requirement d.
Dividend Payout Ratio = Dividend Paid / Net Income * 100
Dividend Payout Ratio = $40 / $110 * 100
Dividend Payout Ratio = 33.3%
Answer to Requirement e.
Dividend Yield Ratio = Dividend per Share / Price per Share *
100
Dividend per Share = Dividend Paid / Common Stock Outstanding
Dividend per Share = $50 / 100
Dividend per Share = $0.50
Dividend Yield Ratio = $0.50 / $9.36 * 100
Dividend Yield Ratio = 5.34%