Lundberg Corporation\'s most recent balance sheet and income statement appear be
ID: 2459361 • Letter: L
Question
Lundberg Corporation's most recent balance sheet and income statement appear below:
Dividends on common stock during Year 2 totaled $80 thousand. The market price of common stock at the end of Year 2 was $9.49 per share.
Compute the return on total assets for Year 2. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Compute the return on common stockholders' equity for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
Compute the book value per share for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Compute the working capital for Year 2. (Input your answer in thousands of dollars. Omit the "$" sign in your response.)
Compute the current ratio for Year 2. (Round your answer to 2 decimal places.)
Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.)
Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Compute the times interest earned for Year 2. (Round your answer to 2 decimal places.)
Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.)
Lundberg Corporation's most recent balance sheet and income statement appear below:
Explanation / Answer
Compute the return on total assets for Year
Retrun on Assets = Net income/Average total Assets*100
ROA = 200/(1797+1787)/2*100 = 11.16%
Compute the return on common stockholders' equity for Year 2
Return on common stockholders' equity = (Net income - Preferred dividends)/ Average common stockholders' equity
Return on common stockholders' equity = (200-0)/(627+530)/2*100 = 34.04%
Book value per share = Common stockholders' equity/Number of common shares outstanding
Book value per share = 627/100 = $6.27 per share
Compute the working capital for Year 2. (Input your answer in thousands of dollars. Omit the "$" sign in your response.)
Working Capital = 770/640 = 1.20
Compute the current ratio for Year 2. (Round your answer to 2 decimal places.)
=
Acid-test ratio = CA-Inventory/CL = 770-220/640 = 550/640 = 0.86
Accounts receivable turnover = 1460/325 = 4.49
Compute the average collection period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to one decimal place.)
Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Inventory turnover = 863/215 = 4.01
Compute the average sale period for Year 2. (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Compute the times interest earned for Year 2. (Round your answer to 2 decimal places.)
Times interest earned = (200+44+86)/44 = 7.5 times
Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.)
Debt-to-equity ratio = 940/1,797 = 0.52
Book value per share = Common stockholders' equity/Number of common shares outstanding
Book value per share = 627/100 = $6.27 per share
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