Lundberg Corporation\'s most recent balance sheet and income statement appear be
ID: 2480782 • Letter: L
Question
Lundberg Corporation's most recent balance sheet and income statement appear below:
Dividends on common stock during Year 2 totaled $80 thousand. The market price of common stock at the end of Year 2 was $9.30 per share.
Compute the gross margin percentage for Year 2. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Compute the price-earnings ratio for Year 2. (Do not round intermediate calculations. 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. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Compute the return on total assets 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 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 2 decimal places.)
Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.)
Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. 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.)
Lundberg Corporation's most recent balance sheet and income statement appear below:
Explanation / Answer
a) Gross Margin percentage = Gross profit / Net sales * 100 = 590 / 1460 * 100 = 40.4% b) Earning per share = ( Net income - preferred dividends) / weighted average common stock outstanding = 200 / 100 = 2 c) Price earning ratio = market price per share / earning per share = 9.3/2 = 4.7 0.4 d) Dividend payout ratio = Total dividend / Net Income = 80 / 200 = 0.40 e) Dividend yeild ratio = cash dividend per share / market value per share cash dividend per share = 80 / 100 = 0.80 Dividend yeild ratio = 0.80 / 9.3 = 0.086 = 8.6% f) Return on total assets = net Income / Average total assets Average total assets = ( 1511+1501)/2 = 1506 ROA = 200 / 1506 = 0.1328 = 13.28 g) Return on equity = net Income /Shareholders equity = 200 /(851-240) = 200 / 611 = 0.3273 = 32.73 h) Book value per share = total common stockholders equity / number of common shares = 611 / 100 = 6.11 i) Working capital = Current asset - current liabilities = 555 - 430 = 125 j) Current ratio = current asset / current liabilities = 555 / 430 = 1.29 k) Acid test ratio = ( current assets - inventory) / current liabilities = ( 555 - 150) / 430 = 405/430 = 0.94 l) accounts receivable turnover = net credit sales / average receivables average receivables = ( 260 + 250)/2 = 255 accounts receivable turnover = 1460 / 255 = 5.73 m) average collection period = Number of working days / debtors turnover ratio = 365 / 5.73 = 63.70 n) Inventory turnover ratio = Cost of goods sold / Average inventory Average inventory = ( 150 + 140)/2 = 145 Inventory turnover = 870 /145 = 6 o) Average sale period = 365 / Inventory turnover = 365 /6 = 60.83 p) times interest earned = Earning before interets and tax / Interets exoense = 337 / 51 = 6.61 q) debt to equity = total liabilities / total equity = 660 /(851-240) = 660/611 = 1.08
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