The following condensed information was reported by Peabody Toys, Inc. for 2018

Question

The following condensed information was reported by Peabody Toys, Inc. for 2018 and 2017 in 000s 2018 2017 Income statement information Net sales Net income Balance sheet information Current assets Property, plant, and equipment (net) $ 5,600 294 $ 4,600 132 840790 1,460 1 110 $ 2,300S 1,908 eBook Total assets Current liabilities Long-term liabilities Paid-in capital Retained earnings $ 1,020 670 790 300 140 790 190 Print Liabilities and shareholders equity $ 2,300 2,900 Required: 1. Determine the following ratios for 2018: (Round your percentage answers to 1 decimel place.) 2. Determine the amount of dividends paid to shareholders during 2018. (Enter your answer in dollars.) 1a. Profit margin on sales 1b. Return on assets 1c. Return on shareholders equity 2. Dividends paid

Explanation / Answer

1a. Profit margin = net income / net sale

= 294 / 5600

=5.25%

1b. return on assets = net income / average total assets

=294 / [(1900+2300)/2]

=294 /2100

= 14%

1c. return on shareholder's equity = net income / average shareholder's equity

=294 / [(440+490)/2]

=294 / 465

=63.2%

2.    Beginning Retained earnings = 140000

   Add: Net income during 2018 = 294000

   = 434000

less: Ending Retained earnings = 190000

   Dividend paid = $244000

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