Question

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

Castile Products, Inc. Balance Sheet December 31
Assets
Current assets:
Cash				$	21,000
Accounts receivable, net					250,000
Merchandise inventory					370,000
Prepaid expenses					8,000
Total current assets					649,000
Property and equipment, net					860,000
Total assets				$	1,509,000
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities				$	290,000
Bonds payable, 12%					340,000
Total liabilities					630,000
Stockholders’ equity:
Common stock, $5 par value				$	110,000
Retained earnings					769,000
Total stockholders’ equity					879,000
Total liabilities and equity				$	1,509,000

Castile Products, Inc. Income Statement For the Year Ended December 31
Sales	$	2,160,000
Cost of goods sold		1,160,000
Gross margin		1,000,000
Selling and administrative expenses		600,000
Net operating income		400,000
Interest expense		40,800
Net income before taxes		359,200
Income taxes (30%)		107,760
Net income	$	251,440

Account balances at the beginning of the year were: accounts receivable, $180,000; and inventory, $350,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $4.15 per share during the year. Also assume that the company’s common stock had a market price of $68 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:

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

      

Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your final percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

        

Dividend yield ratio. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%).)

       

Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to1 decimal place.)

       

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

       

Answer 1