Response to the following problem:
Financial statements for Pracht Company appear below:
Pracht Company
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars)
| |
|
Year 2 |
|
Year 1
|
| Current assets: |
|
|
|
|
| Cash and marketable securities |
$ |
180 |
$ |
170 |
| Accounts receivable, net |
|
130 |
|
100 |
| Inventory |
|
150 |
|
160 |
| Prepaid expenses |
|
50 |
|
60 |
|
|
|
|
|
Total current assets
|
510
|
|
|
490 |
| Noncurrent assets: |
|
|
|
|
| Plant and equipment, net |
|
1,880 |
|
1,800 |
|
|
|
|
|
| Total assets |
$ |
2,390 |
$ |
2,290 |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
| Accounts payable |
$ |
90 |
$ |
140 |
| Accrued liabilities |
|
110 |
|
80 |
| Notes payable, short term |
|
140 |
|
130 |
|
|
|
|
|
| Total current liabilities |
|
340 |
|
350 |
| Noncurrent liabilities: |
|
|
|
|
| Bonds payable |
|
490 |
500 |
|
|
|
|
|
|
| Total liabilities |
|
830 |
|
850 |
|
|
|
|
|
| Stockholders' equity: |
|
|
|
|
| Preferred stock, $10 par value, 15% |
|
100 |
|
100 |
| Common stock, $10 par value |
|
140 |
|
140 |
| Additional paid-in capital--common stock |
|
200 |
|
200 |
| Retained earnings |
|
1,120
|
|
1,000
|
|
|
|
|
|
| Total stockholders' equity |
|
1,560 |
|
1,440 |
|
|
|
|
|
| Total liabilities and stockholders' equity |
$ |
2,390 |
$ |
2,290 |
Pracht Company
Income Statement
For the Year Ended December 31, Year 2
(dollars in thousands)
| Sales (all on account) |
$ |
1,650 |
| Cost of goods sold |
|
1,165 |
|
|
|
| Gross margin |
|
485 |
| Selling and administrative expense |
|
165 |
|
|
|
| Net operating income |
|
320 |
| Interest expense |
|
50 |
|
|
|
| Net income before taxes |
|
270 |
| Income taxes (30%) |
|
81 |
|
|
|
| Net income |
$ |
189 |
Dividends during Year 2 totaled $29 thousand, of which $15 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $150.
Required:
a. Compute the earnings per share (of common stock) for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
b. Compute the price-earnings ratio for Year 2.(Round your answer to 1 decimal place.)
c. Compute the dividend payout ratio for Year 2.(Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.)
d. Compute the dividend yield ratio for Year 2.(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
e. Compute the return on total assets for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
f. Return on common stockholders' equity for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
g. Compute the book value per share for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)
h. Compute the working capital for Year 2.(Input your answer in thousands of dollars. Omit the "$" sign in your response.)
i. Compute the current ratio for Year 2. (Round your answer to 1 decimal place.)
j. Compute the acid-test ratio for Year 2. (Round your answer to 2 decimal places.)
k. Compute the accounts receivable turnover for Year 2. (Omit the "$" sign in your response.)
l. Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)
m. Compute the inventory turnover for Year 2. (Omit the "$" sign in your response.)
n. Compute the average sale period for Year 2. (Use 365 days in a year. Round your answer to 1 decimal place.)
p. Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.)