Explain the statements for heritage antiquing services

Question

Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear below. The company did not issue any new common or preferred stock during the year. A total of 700 thousand shares of common stock were outstanding. The interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $1.00. The market value of the company's common stock at the end of the year was $23. All of the company's sales are on account.

Heritage Antiquing Services Comparative Balance Sheet (dollars in thousands)
	This Year			Last Year
Assets
Current assets:
Cash	$	1,140		$	1,290
Accounts receivable, net		9,800			7,600
Inventory		12,600			11,600
Prepaid expenses		780			620
Total current assets		24,320			21,110
Property and equipment:
Land		10,300			10,300
Buildings and equipment, net		39,726			36,158
Total property and equipment		50,026			46,458
Total assets	$	74,346		$	67,568
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	18,600		$	18,600
Accrued payables		1,070			750
Notes payable, short term		190			190
Total current liabilities		19,860			19,540
Long-term liabilities:
Bonds payable		9,700			9,700
Total liabilities		29,560			29,240
Stockholders' equity:
Preferred stock		1,000			1,000
Common stock		700			700
Additional paid-in capital		4,000			4,000
Total paid-in capital		5,700			5,700
Retained earnings		39,086			32,628
Total stockholders' equity		44,786			38,328
Total liabilities and stockholders' equity	$	74,346		$	67,568

Heritage Antiquing Services Comparative Income Statement and Reconciliation (dollars in thousands)
	This Year			Last Year
Sales	$	70,000		$	64,000
Cost of goods sold		39,000			41,000
Gross margin		31,000			23,000
Selling and administrative expenses:
Selling expenses		10,900			10,300
Administrative expenses		7,100			6,800
Total selling and administrative expenses		18,000			17,100
Net operating income		13,000			5,900
Interest expense		970			970
Net income before taxes		12,030			4,930
Income taxes		4,812			1,972
Net income		7,218			2,958
Dividends to preferred stockholders		60			370
Net income remaining for common stockholders		7,158			2,588
Dividends to common stockholders		700			700
Net income added to retained earnings		6,458			1,888
Retained earnings, beginning of year		32,628			30,740
Retained earnings, end of year	$	39,086		$	32,628

Required:

Compute the following financial ratios for common stockholders for this year:

1.	Gross margin percentage. (Round your answer to 1 decimal place.)

Gross margin percentage

%

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

Earnings per share

$

3.	Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)

Price-earnings ratio

times

4.	Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)

Dividend payout ratio

%

5.	Dividend yield ratio. (Round your answer to 1 decimal place.)

Dividend yield ratio

%

6.	Return on total assets. (Round your intermediate calculations to whole numbers and final answer to 1 decimal place.)

Return on total assets

%

7.	Return on common stockholders' equity. (Round your intermediate calculations to whole numbers and final answer to 1 decimal place.)

Return on common stockholders' equity

%

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

Book value per share

$