Problem:
Financial statements for Praeger Company appear below:
Praeger Company
Statement of Financial Position
December 31, 19X6 and 19X5
(dollars in thousands)
19X6 19X5
Current assets:
Cash and marketable securities $100 $100
Accounts receivable, net 170 170
Inventory 110 110
Prepaid expenses 60 60
Total current assets 440 440
Noncurrent assets:
Plant & equipment, net 2,020 1,990
Total assets $2,460 $2,430
Current liabilities:
Accounts payable $140 $170
Accrued liabilities 70 50
Notes payable, short term 100 120
Total current liabilities 310 340
Noncurrent liabilities:
Bonds payable 500 500
Total liabilities 810 840
Stockholders' equity:
Preferred stock, $5 par, 5% 100 100
Common stock, $5 par 200 200
Additional paid-in capital--common stock 200 200
Retained earnings 1,150 1,090
Total stockholders' equity 1,650 1,590
Total liabilities & stockholders' equity $2,460 $2,430
Praeger Company
Income Statement
For the Year Ended December 31, 19X6
(dollars in thousands)
Sales (all on account) $1,100
Cost of goods sold 770
Gross margin 330
Operating expenses 130
Net operating income 200
Interest expense 50
Net income before taxes 150
Income taxes (30%) 45
Net income $105
Dividends during 19X6 totalled $45 thousand, of which $5 thousand were preferred dividends.
The market price of a share of common stock on December 31, 19X6 was $30.
Required:
Compute the following for 19X6:
(a.) Earnings per share of common stock.
(b.) Price-earnings ratio.
(c.) Dividend payout ratio.
(d.) Dividend yield ratio.
(e.) Return on total assets.
(f.) Return on common stockholders' equity.
(g.) Book value per share.
(h.) Working capital.
(i.) Current ratio.
(j.) Acid-test (quick) ratio.
(k.) Accounts receivable turnover.
(l.) Average collection period (age of receivables).
(m.) Inventory turnover.
(n.) Average sale period (turnover in days).
(o.) Times interest earned.
(p.) Debt-to-equity ratio.