***Please input the answer the same as I would in the problem. Condensed balance
ID: 2427207 • Letter: #
Question
***Please input the answer the same as I would in the problem.
Condensed balance sheet and income statement data for Landwehr Corporation appear below. Additional information: the market price of Landwehr's common stock was dollar 2.00, dollar 6.00, and dollar 9.00 for 2016, 2017, and 2018, respectively. All dividends were paid in cash. Compute the following ratios for 2017 and 2018. (Round Earnings per share to 2 decimal places, e.g. 1.65, and all other answers to 1 decimal place, e.g. 6.8 or 6.8%.)Explanation / Answer
1) profit margin ration in 2017= Net income/ net sales
= 38,900/ 656,400= 5.93%
profit margin ration in 2018= 65,100/ 704,100= 9.24%
2) Asset turnover ratio= net sales/ average total assets
in 2017= 656,400/ (533,500+597,700)/2= 1.16
in 2018= 704,100/ ( 597,700+640,200)/2 = 1.14
3) Earning per share= (net income - preferred dividends)/ weighted average common shares outstanding
in 2017= 38,900/ 29300= 1.327
in 2018= 65,100/ 30,900 = 2.107
4) price earning ratio = market value price per share/ earning per share
in 2017= 6/ 1.327= 4.52
in 2018= 9/ 2.107 = 4.27
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