The financial statements for Castile Products, Inc., are given below: Account ba

Question

The financial statements for Castile Products, Inc., are given below:

     Account balances at the beginning of the year were: accounts receivable, $25,000; and inventory, $60,000. All sales were on account.

Assume that Castile Products, Inc., paid dividends of $2.10 per share during the year. Also assume that the company’s common stock had a market price of $42 at the end of the year and there was no change in the number of outstanding shares of common stock during the year.

Earnings per share. (Round your answer to 2 decimal places.)

Dividend payout ratio. (Round your intermediate calculations to 2 decimal places. Round your percentage answer to nearest whole number.)

Price-earnings ratio. (Round your intermediate calculations to 2 decimal places. Round your answer to nearest whole number.)

Book value per share. (Round your answer to 2 decimal places.)

The financial statements for Castile Products, Inc., are given below:

Explanation / Answer

1. Earning per share = Net Income / Number of shares

= $21000 / 6000 = $3.50 per share

Number of shares = $30000/$5 = 6000

2. Dividend Payout Ratio = Dividend / EPS * 100

= $2.10 / $3.50 * 100 = 60%

3. Dividend Yield Ratio = Dividend / Current price per share * 100

= $2.10 / $42 * 100 = 5%

4. Price earnings Ratio = Price / EPS

= 42 / 3.5 = 12

5. Book Value per share = total stockholders equity / number of shares

= $170000 / 6000 = $28.33

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