3 Lundberg Corporation\'s most recent balance sheet and income statement appear

Question

3 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) Year 2 Year 1 Asset Current assets: Cash Accounts receivable Inventory Prepaid expenses $ 190 S 200 300 310 200 190 20 20 Total current assets Plant and equipment, net 710 720 981 961 Total assets $1,691 S1,681 Liabilities and stockholders' equity Current liabilities: Accounts payable Accrued liabilities Notes payable, short term $ 250 240 140 140 190 200 Total current liabilities Bonds payable 580 580 280 330 Total liabilities 860 910 Stockholders' equity: Preferred stock, $100 par value, 10% Common stock, $1 par value Additional paid-in capital--common stock Retained earnings 290 290 100 110 331 280 100 110 Total stockholders' equity 831 780 Total liabilities and stockholders' equity 1,691 $1,690

Explanation / Answer

amt '000 USD Lundberg Corporation Details Amt /Ratio a Gross Margin Year 2= Gross Margin/Sales = 39.51% b EPS Year 2=Net Income for common stock holders/No of common stock outstanding Net income                   120 Less Preference dividend =290*10%=                     29 Net Income for Common stockholders               91.00 Outstanding common stock in '000=                   100 EPS =91/100 $             0.91 c Price Earning Ratio=Price/EPS Market Price per share                 9.45 EPS =                 0.91 P/E ratio=               10.38 d Dividend Payout ratio Year 2= Dividend for Common stockholders/Net Income for Common   Stock holders Dividend paid to common stock holders=               40.00 Dividend Payout ratio Year 2= 40/91= 43.96% e Dividend Yield= Dividend per share/Market Price Outstanding common stock in '000=                   100 Dividend paid to common stock holders=               40.00 DPS =40/100=                 0.40 f Return on Total Asset =Net income/Avg Asset= 7.12% g Return on Common stock holders' equity Year 2= 18% h Book Value per share Year 2 Book Value of Total common stock yr 2                   541 Total Common stock outstanding                   100 Book Value per share Year 2 $             5.41 i Working Capital Yr 2                   130 J Current ratio Year 2                 1.22 k Acis test Ratio Yr 2                 0.84 l AR turnover = Credit Sales/Avg AR=                 4.66 times m Avg Collection period=365/4.66=               78.40 days n Inventory TO = COGS/Avg Inventory                 4.41 times o Average sales period=365/4.41=               82.77 days p Times interest earned Yr 2=EBIT/Interest expense=               5.275 q Debt to Equity =                 1.03

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