[The following Information applies to the questions displayed below.] You have j

Question

[The following Information applies to the questions displayed below.] You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, Including comparing Lydex's performance to its major competitors. The company's financial statements for the last two vears are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash Marketable securitles Accounts recelvable, net Inventory Prepald expenses $ 880,000 $ 1120,000 300,000 1480,000 2,200,000 180,000 0 2,380,000 3,520,000 240,000 Total current assets Plant and equipment, net 7,020,000 9,360,000 5,280,000 8,970,000 Total assets $16,380,000 $14,250,000 Liabilties and Stockholders' Equity Liablities: Current llablities Note payable, 10% $ 3,930,000 3,620,000 $ 2,820,000 3,020,000 Total lablities 7,550,000 5,840,000 Stockholders' equity Common stock, $75 par value Retained earnings 7,500,000 1,330,000 7,500,000 910,000 Total stockholders' equity 8,830,000 8,410,000 Total liabilitles and stockholders' equity $16,380,000 $14,250,000

Explanation / Answer

SOLUTION:

(Since you have already solved the part a,d & e so I will solve the remaining part)

(B) Dividend Yield Ratio:

This year= Dividend per share/market value per share

   = (280000/100000)/78 =2.8/78 = 0.0359 or 3.59%

Last year = (462350/100000)/46 =4.6235/46 = 0.1005 or 10.05%

(C) Dividend payout ratio:

This year = Amount of dividend paid to stockholders/Total net income =280000/700000= 0.4 or 40%

Last year = 462350/924700 = 0.5 or 50%

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