Lundberg Corporation\'s most recent balance sheet and income statement appear be
ID: 2382270 • Letter: L
Question
Lundberg Corporation's most recent balance sheet and income statement appear below:
Dividends on common stock during Year 2 totaled $50 thousand. Dividends on preferred stock totaled $20 thousand. The market price of common stock at the end of Year 2 was $9.36 per share.
Gross margin percentage. (Round your answer to 1 decimal place.)
b.
Earnings per share of common stock. (Round your answer to 2 decimal places.)
c.
Price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
d.
Dividend payout ratio. (Round your intermediate calculations to 2 decimal places and final answer to 1 decimal place.)
e.
Dividend yield ratio. (Round your answer to 2 decimal places.)
f.
Return on total assets. (Round your intermediate calculations and final answer to 2 decimal places.)
g.
Return on common stockholders' equity. (Round your answer to 2 decimal places.)
h.
Book value per share. (Round your answer to 2 decimal places.)
i.
Working capital.
j.
Current ratio. (Round your answer to 2 decimal places.)
k.
Acid-test ratio. (Round your answer to 2 decimal places.)
l.
Accounts receivable turnover. (Round your answer to 2 decimal places.)
m.
Average collection period. (Assume 365 days a year and round your answer to 1 decimal place.)
n.
Inventory turnover. (Round your answer to 2 decimal places.)
o.
Average sale period. (Assume 365 days a year and round your answer to 1 decimal place.)
p.
Times interest earned. (Round your answer to 2 decimal places.)
q.
Debt-to-equity ratio. (Round your answer to 2 decimal places.)
Statement of Financial PositionDecember 31, Year 2 and Year 1
(in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $ 100 $ 110 Accounts receivable 210 220 Inventory 110 120 Prepaid expenses 10 10 Total current assets 430 460 Plant and equipment, net 900 880 Total assets $ 1,330 $ 1,340 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 160 $ 170 Accrued liabilities 50 50 Notes payable, short term 100 90 Total current liabilities 310 310 Bonds payable 190 240 Total liabilities 500 550 Stockholders' equity: Preferred stock, $100 par value, 10% 200 200 Common stock, $1 par value 100 100 Additional paid-in capital--common stock 110 110 Retained earnings 420 380 Total stockholders' equity 830 790 Total liabilities & stockholders' equity $ 1,330 $ 1,340
Explanation / Answer
b. Earnings per share (of common stock)
Earnings per share = (Net Income - Preferred Dividends)/Average number of common shares outstanding*
($110 - $20) / (100 shares + 100 shares) / 2 = $0.90 per share
c. Price-earnings ratio
Price-earnings ratio = Market price per share
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