Gerrard Construction Co. is an excavation contractor. The following summarized d

Question

Gerrard Construction Co. is an excavation contractor. The following summarized data (in thousands) are taken from the December 31, 2013, financial statements: At December 31, 2012, total assets were $82,000 and total stockholders' equity was $32,600. There were no changes in notes payable or paid-in capital during 2013.

Indicate the note disclosures that should be provided by Gerrard Construction Co.

The effects of accounting changes

Pension and post-retirement plans

Contingencies and commitments

Events subsequent to the balance sheet

Change in equity Number of employees

Gross profit & Net profit

Company's effective income tax rate

Details of the company's employee benefit

Significant accounting policies

Earnings per share

Assume that the balance of "Accounts Receivable, net" at December 31, 2012, was $8,200.

Calculate the following activity measures for Gerrard Construction Co. for the year ended December 31, 2013:

- Calculate the Accounts Receivable Turnover________________

- Calculate the number of days' sales in accounts receivable using 365 days of the year:_______________

Calculate the following financial leverage measures for Gerrard Construction Co. at December 31, 2013:

- Debt Ratio:____________ - Debt/Equity Ratio:___________

Calculate the amount of dividends declared and paid during the year ended December 31, 2013:_________

Review the answer from above. At this time. Assume that Gerrard Construction Co. had 2,400,000 shares of $1 par value common stock outstanding throughout 2013, and that the market price per share of common stock at December 31, 2013, was $18.75.

Calculate the following profitability measures for the year ended December 31, 2013:

- Earnings per share of common stock:____________ - Price/Earnings Ratio:______________

- Dividend Yield Percentage:______________ - Dividend Payout Ratio Percentage :____________

Net revenues Cost of services provided Depreciation expense $32,.200 11.400 6,500 Operating income Interest expense Income tax expense $ 14,300 3,800 3,200 Net income $ 7,300 At December 31, 2013: Assets Cash and short-term investments Accounts receivable, net Property, plant, and equipment, net $ 2,800 9,800 77400 Total assets $90,000 Liabilities and Stockholders Equity Accounts payable Income taxes payable Notes payable (long term) Paid-in capital Retained earnings $ 1,500 1,600 47500 10.000 29.400 Total liabilities and stockholders' equity $90.000

Explanation / Answer

Accounts Receivable Turnover = 32,200 / (9,800 + 8,200) / 2 = 3.58

Calculate the number of days' sales in accounts receivable using 365 days of the year = 365 / 3.58 = 102.02

Debt Ratio = (Total assets - Equity) / Total assets = (90000- (10000+29400)) / 90000 = 0.56

Debt equity Ratio = 47500 / (10000+29400) = 1.21

Dividend declared and paid = Opening equity + net profit for the year - Closing equity

= 32600 + 7300 - (10000 + 29400) = 500

EPS = 7300 / 2400000 = $3.04

P / E = 18.75 / 3.04 = 6.16

Dividend yield = DPS / Price = .208 / 18.75 * 100 = 1.11 %

= Payout ratio = DPS / EPS = 0.208 / 3.04 = 6.85%

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