Financial statements for Pracht Company appear below: Dividends during Year 2 to

Question

Financial statements for Pracht Company appear below:

Dividends during Year 2 totaled $86 thousand, of which $17 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $110.

Required:

Compute the earnings per share (of common stock) for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Compute the price-earnings ratio for Year 2.(Round your answer to 1 decimal place.)

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.)

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.)

Compute the return on total assets for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Return on common stockholders' equity for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Compute the book value per share for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Compute the working capital for Year 2.(Input your answer in thousands of dollars. Omit the "$" sign in your response.)

Compute the current ratio for Year 2. (Round your answer to 1 decimal place.)

Compute the acid-test ratio for Year 2. (Round your answer to 2 decimal places.)

Compute the accounts receivable turnover for Year 2. (Omit the "$" sign in your response.)

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.)

Compute the inventory turnover for Year 2. (Omit the "$" sign in your response.)

Compute the average sale period for Year 2. (Use 365 days in a year. Round your answer to 1 decimal place.)

Compute the times interest earned for Year 2.(Round your answer to 2 decimal places.)

Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.)

Financial statements for Pracht Company appear below:

Explanation / Answer

(a) EPS, year 2 = Net income / Number of shares outstanding = $196,000 / ($160,000 / $10) = $196,000 / 16,000

= $12.25

(b) Price/Earning, year 2 = Share price / EPS = $110 / $12.25 = 9.0 (Rounded off)

(c) Dividend payout ratio (DPR) = Dividend / Net income = $86,000 / $196,000 = 0.439 = 43.9%

Note: Common stock DPR = $(86,000 - 17,000) / $196,000 = $69,000 / $196,000 = 0.352 = 35.2%

(d) Dividend yield = Dividend per share / Share price

Number of shares (common stock) = $160,000 / $10 = 16,000

Dividend yield = [$(86,000 - 17,000) / 16,000] / $110 = ($69,000 / 16,000) / $110 = 0.0392 = 3.92%

Note: First 4 sub-questions are answered.

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