Lundberg Corporation\'s most recent balance sheet and income statement appear be

Question

Lundberg Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Asset: Current assets: Cash $ 140 $ 150 Accounts receivable 250 260 Inventory 150 140 Prepaid expenses 15 15 Total current assets 555 565 Plant and equipment, net 956 936 Total assets $ 1,511 $ 1,501 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 200 $ 190 Accrued liabilities 90 90 Notes payable, short term 140 150 Total current liabilities 430 430 Bonds payable 230 280 Total liabilities 660 710 Stockholders' equity: Preferred stock, $100 par value, 10% 240 240 Common stock, $1 par value 100 100 Additional paid-in capital--common stock 110 110 Retained earnings 401 305 Total stockholders' equity 851 755 Total liabilities and stockholders' equity $ 1,511 $ 1,465 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $ 1,460 Cost of goods sold 870 Gross margin 590 Selling and administrative expenses 253 Net operating income 337 Interest expense 51 Net income before taxes 286 Income taxes (30%) 86 Net income $ 200 Dividends on common stock during Year 2 totaled $80 thousand. The market price of common stock at the end of Year 2 was $9.30 per share. Required: a. Compute the gross margin percentage for Year 2. (Round your answer to 1 decimal place. Omit the "%" sign in your response.) Gross margin percentage % b. Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.) Earnings per share $ c. Compute the price-earnings ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Price-earnings ratio d. Compute the dividend payout ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.) Dividend payout ratio % e. Compute the dividend yield ratio for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Dividend yield ratio % f. 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.) Return on total assets % g. Compute the return on common stockholders' equity for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Return on common stockholders' equity % h. Compute the book value per share for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Book value per share $ i. Compute the working capital for Year 2. (Input your answer in thousands of dollars. Omit the "$" sign in your response.) Working capital $ j. Compute the current ratio for Year 2. (Round your answer to 2 decimal places.) Current ratio k. Compute the acid-test ratio for Year 2.(Round your answer to 1 decimal place.) Acid-test ratio l. Compute the accounts receivable turnover for Year 2. (Round your answer to 2 decimal places.) Accounts receivable turnover m. 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.) Average collection period days n. Compute the inventory turnover for Year 2. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Inventory turnover $ o. 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.) Average sale period days p. Compute the times interest earned for Year 2. (Round your answer to 2 decimal places.) Times interest earned q. Compute the debt-to-equity ratio for Year 2. (Round your answer to 2 decimal places.) Debt-to-equity ratio

Explanation / Answer

Answer a. Gross Margin Ratio - Year 2 = Gross Margin / Sales Gross Margin Ratio - Year 2 = 590 / 1460 = 40.4% Answer b. Earning per Share = (Net Income - Preferred Dividends) / Avg. No. of Shares Outstandings Earning per Share - Year 2 = ($200 - $24) / (100 Shares + 100 Shares) / 2 = $1.76 per share Answer c. Price Earning ratio = Market Price per Share / Earning per share Price Earning ratio - Year 2 = $9.20 / 1.76 = 5.23 Answer d. Dividend Payout Ratio = Dividend Per Share / Earning per Share Dividend Per Share = 80 / 100 = $0.80 Dividend Payout Ratio - Year 2 = $0.80 / $1.76 = 45.45% As per Chegg Guidelines, You can ask only one question at a time having four subparts. For other parts or Questions please ask it again.

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