The financial statements for Castile Products, Inc, are given below Castile Prod

Question

The financial statements for Castile Products, Inc, are given below Castile Products, Inc. Balance Sheet December 31 Assets Current assets: Cash Accounts receivable, net Merchandise inventory 20,000 220,000 380,000 8,000 Prepaid expenses Total current assets Property and equipment, net 628,000 890,000 Total assets $1,518,000 Liabilities and Stockholders' Equity Liabilities S 220,000 Current liabilities Bonds payable, 12% 330,000 550,000 $ 190,000 Total liabilities Stockholders' equity Common stock, $10 par value Retained earnings 778,000 968,000 $1,518,000 Total stockholders' equity Total liabilities and equity stile Products, Inc. Income Statement For the Year Ended December 31 Sales Cost of goods sold $2.130.000 1,190,000 Gross margin Selling and administrative expenses 940,000 580,000 Net operating income Interest expense 360.000 39,600 Net income before taxes Income taxes (30%) 320.400 96,120 Net income S 224,280

Explanation / Answer

Earnings per share = Net income - Preferred dividends / Weighted average common shares outstanding

= $224280 - $0 / 19000 shares

= $11.80.

Dividend payout ratio = Dividends / Net income

= $69350 / $224280

= 0.3092.

Dividend yield ratio = Dividend per share / market value per share

= $3.65 / $65

= 0.056.

Price earnings ratio = Market price per share / Earnings per share

= $65 / $11.80

= 5.51.

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