Markus Company’s common stock sold for $2.00 per share at the end of this year.
ID: 2499211 • Letter: M
Question
Markus Company’s common stock sold for $2.00 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements:
References
Section BreakFoundational [LO15-2, LO15-3, LO15-4, LO15-5, LO15-6]
1.
value:
0.33 points
Required information
Foundational 15-1
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-1Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
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2.
value:
0.33 points
Required information
Foundational 15-2
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-2Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
3.
value:
0.33 points
Required information
Foundational 15-3
What is the dividend payout ratio and the dividend yield ratio? (Do not round intermediate calculations. Round your answer to the nearest whole percentage place. i.e., 0.1234 should be considered as 12%)
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-3Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
4.
value:
0.33 points
Required information
Foundational 15-4
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-4Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
5.
value:
0.33 points
Required information
Foundational 15-5
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-5Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
6.
value:
0.33 points
Required information
Foundational 15-6
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-6Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
7.
value:
0.33 points
Required information
Foundational 15-7
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-7Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
8.
value:
0.33 points
Required information
Foundational 15-8
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-8Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
9.
value:
0.33 points
Required information
Foundational 15-9
What is the accounts receivable turnover and the average collection period? (Use 365 days in a year. Round your intermediate and final answers to 2 decimal places.)
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-9Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
10.
value:
0.33 points
Required information
Foundational 15-10
What is the inventory turnover and the average sale period? (Use 365 days in a year. Round your intermediate and final answers to 2 decimal places.)
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-10Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
11.
value:
0.34 points
Required information
Foundational 15-11
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-11Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
12.
value:
0.34 points
Required information
Foundational 15-12
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-12Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
13.
value:
0.34 points
Required information
Foundational 15-13
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-13Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
14.
value:
0.34 points
Required information
Foundational 15-14
References
eBook & Resources
WorksheetLearning Objective: 15-02 Compute and interpret financial ratios that managers use to assess liquidity.Learning Objective: 15-05 Compute and interpret financial ratios that managers use to assess profitability.
Foundational 15-14Learning Objective: 15-03 Compute and interpret financial ratios that managers use for asset management purposes.Learning Objective: 15-06 Compute and interpret financial ratios that managers use to assess market performance.
Difficulty: 2 MediumLearning Objective: 15-04 Compute and interpret financial ratios that managers use for debt management purposes.
Check my work
15.
value:
0.34 points
Required information
Foundational 15-15
Markus Company’s common stock sold for $2.00 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements:
Explanation / Answer
1. Earning per share = Net income / Number of common stock
= 105450 / 111000
= 0.95
2. Price-earning ratio = Market price per share / Earning per share
= 2 / 0.95
= 2.105 i.e., 2.11 (approx)
3. Dividend pay out ratio = Total dividend / Net income * 100
= 0.42 * 111000 / 105450 * 100
= 46620 / 105450 * 100
= 44.21 %
Dividend Yield = Dividend per share / Market price per share
= 0.42 / 2
= 0.21 i.e., 21 %
4. Return on Total assets = Profit after Tax / Total assets * 100
Profit after Tax = 105450 - 30% = 73815
= 73815 / 353000 * 100
= 20.91 % (NOTE 1)
(NOTE 1):- Return is calculated on assets at the end of year. Alternativley you can also calculate return on average Total assets (opening + ending / 2).
5. Return on equity = Return / Equity
= 105450 / 255000
= 0.4135 i.e., 41.35 %
6. Book value per share = Total stock hloders funds / Number of common stock
= 255000 / 111000
= 2.30 (approx)
7. Current ratio = Current assets / Current liabilties
= 131800 / 52500
= 2.51 : 1
Working capital = Current assets - Current laibilities
= 131800 - 52500
= 79300
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