Cepeda Company manufactures backpacks. During 2014, Cepeda issued bonds at 11% interest and used the cash proceeds to purchase treasury stock. The following financial information is available for Cepeda Company for the years 2014 and 2013.
| 2014 |
2013 |
| Sales revenue |
$12,114,000 |
$12,114,000 |
| Net income |
3,015,040 |
3,365,000 |
| Interest expense |
708,000 |
198,240 |
| Tax expense |
901,820 |
1,009,500 |
| Dividends paid on common stock |
1,260,240 |
1,452,816 |
| Dividends paid on preferred stock |
424,800 |
424,800 |
| Total assets (year-end) |
19,517,000 |
22,713,750 |
| Average total assets |
22,213,500 |
25,152,408 |
| Total liabilities (year-end) |
8,496,000 |
4,248,000 |
| Avg. total common stockholders' equity |
13,310,400 |
19,965,600 |
(a) Use the information above to calculate the following ratios for both years: (Round answers to 1 decimal place, e.g. 12.5% or 12.5.)
| 2014 |
2013 |
| (i) |
Return on assets |
|
% |
|
% |
| (ii) |
Return on common stockholders' equity |
|
% |
|
% |
| (iii) |
Payout ratio |
|
% |
|
% |
| (iv) |
Debt to assets ratio |
|
% |
|
% |
| (v) |
Times interest earned |
|
times |
|
times |