Financial statements for Pracht Company appear below:
| Pracht Company Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) |
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| Year 2 | Year 1 | |||||||
| Current assets: | ||||||||
| Cash and marketable securities | $ | 180 | $ | 170 | ||||
| Accounts receivable, net | 130 | 100 | ||||||
| Inventory | 150 | 160 | ||||||
| Prepaid expenses | 50 | 60 | ||||||
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| Total current assets | 510 | 490 | ||||||
| Noncurrent assets: | ||||||||
| Plant and equipment, net | 1,880 | 1,800 | ||||||
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| Total assets | $ | 2,390 | $ | 2,290 | ||||
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| Current liabilities: | ||||||||
| Accounts payable | $ | 90 | $ | 140 | ||||
| Accrued liabilities | 110 | 80 | ||||||
| Notes payable, short term | 140 | 130 | ||||||
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| Total current liabilities | 340 | 350 | ||||||
| Noncurrent liabilities: | ||||||||
| Bonds payable | 490 | 500 | ||||||
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| Total liabilities | 830 | 850 | ||||||
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| 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 | ||||||
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| Total stockholders’ equity | 1,560 | 1,440 | ||||||
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| Total liabilities and stockholders’ equity | $ | 2,390 | $ | 2,290 | ||||
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| Pracht Company Income Statement For the Year Ended December 31, Year 2 (dollars in thousands) |
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| Sales (all on account) | $ | 1,650 | |
| Cost of goods sold | 1,165 | ||
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| Gross margin | 485 | ||
| Selling and administrative expense | 165 | ||
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| Net operating income | 320 | ||
| Interest expense | 50 | ||
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| Net income before taxes | 270 | ||
| Income taxes (30%) | 81 | ||
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| Net income | $ | 189 | |
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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 $150. |
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Required: |
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| a. |
Compute the earnings per share (of common stock) for Year 2. (Round your answer to 2 decimal places. Omit the “$” 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.) |
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