Lundberg Corporation”s most recent balance sheet and income statement appear below:
| Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) |
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| Year 2 | Year 1 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash | $ | 100 | $ | 110 | ||
| Accounts receivable | 210 | 220 | ||||
| Inventory | 110 | 120 | ||||
| Prepaid expenses | 10 | 10 | ||||
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| Total current assets | 430 | 460 | ||||
| Plant and equipment, net | 900 | 880 | ||||
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| Total assets | $ | 1,330 | $ | 1,340 | ||
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| Liabilities and Stockholders” Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 160 | $ | 170 | ||
| Accrued liabilities | 50 | 50 | ||||
| Notes payable, short term | 100 | 90 | ||||
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| Total current liabilities | 310 | 310 | ||||
| Bonds payable | 190 | 240 | ||||
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| Total liabilities | 500 | 550 | ||||
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| Stockholders” equity: | ||||||
| Preferred stock, $100 par value, 10% | 200 | 200 | ||||
| Common stock, $1 par value | 100 | 100 | ||||
| Additional paid in capital common stock | 110 | 110 | ||||
| Retained earnings | 420 | 380 | ||||
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| Total stockholders” equity | 830 | 790 | ||||
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| Total liabilities & stockholders” equity | $ | 1,330 | $ | 1,340 | ||
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| Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) |
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| Sales (all on account) | $ | 1,330 | ||
| Cost of goods sold | 850 | |||
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| Gross margin | 480 | |||
| Selling and administrative expense | 292 | |||
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| Net operating income | 188 | |||
| Interest expense | 31 | |||
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| Net income before taxes | 157 | |||
| Income taxes (30%) | 47 | |||
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| Net income | $ | 110 | ||
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Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $20 thousand. The market price of common stock at the end of Year 2 was $9.36 per share. |
| Required: | |
| Compute the following for Year 2: |
| a. |
Gross margin percentage. (Round your answer to 1 decimal place.) |
| Gross margin percentage | % |
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b. |
Earnings per share of common stock. (Round your answer to 2 decimal places.) |
| Earnings per share | $ |
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c. |
Price earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) |
| Price earnings ratio | times |
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d. |
Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.) |
| Dividend payout ratio | % |
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e. |
Dividend yield ratio. (Round your answer to 2 decimal places.) |
| Dividend yield ratio | % |
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f. |
Return on total assets. (Round your intermediate calculations and final answer to 2 decimal places.) |
| Return on total assets | % |
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g. |
Return on common stockholders” equity. (Round your answer to 2 decimal places.) |
| Return on common stockholders” equity | % |
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h. |
Book value per share. (Round your answer to 2 decimal places.) |
| Book value per share | $ |
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i. |
Working capital. |
| Working captial | $ |
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j. |
Current ratio. (Round your answer to 2 decimal places.) |
| Current ratio |
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k. |
Acid test ratio. (Round your answer to 2 decimal places.) |
| Acid test ratio |
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l. |
Accounts receivable turnover. (Round your answer to 2 decimal places.) |
| Accounts receivable turnover |
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m. |
Average collection period. (Assume 365 days a year and round your answer to 1 decimal place.) |
| Average collection period | days |
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n. |
Inventory turnover. (Round your answer to 2 decimal places.) |
| Inventory turnover |
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o. |
Average sale period. (Assume 365 days a year and round your answer to 1 decimal place.) |
| Average sale period | days |
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p. |
Times interest earned. (Round your answer to 2 decimal places.) |
| Times interest earned |
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q. |
Debt to equity ratio. (Round your answer to 2 decimal places.) |
| Debt to equity ratio |
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