Lundberg Corporation\'s most recent balance sheet and income statement appear be
ID: 2481628 • 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. The market price of common stock at the end of Year 2 was $9.33 per share.
Compute the gross margin percentage for Year 2. (Round your answer to 1 decimal place. Omit the "%" sign in your response.)
Compute the earnings per share (of common stock) for Year 2.(Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Compute the price-earnings ratio for Year 2. (Do not round intermediate calculations. Round your answer to 1 decimal place.)
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.)
Compute the dividend yield ratio for Year 2. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
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.)
December 31, Year 2 and Year 1
(in thousands of dollars) Year 2 Year 1 Asset: Current assets: Cash $ 170 $ 180 Accounts receivable 280 290 Inventory 180 170 Prepaid expenses 20 20 Total current assets 650 660 Plant and equipment, net 953 933 Total assets $ 1,603 $ 1,593 Liabilities and stockholders' equity: Current liabilities: Accounts payable $ 230 $ 220 Accrued liabilities 120 120 Notes payable, short term 170 180 Total current liabilities 520 520 Bonds payable 260 310 Total liabilities 780 830 Stockholders' equity: Preferred stock, $100 par value, 10% 270 270 Common stock, $1 par value 100 100 Additional paid-in capital--common stock 110 110 Retained earnings 343 280 Total stockholders' equity 823 760 Total liabilities and stockholders' equity $ 1,603 $ 1,590
Explanation / Answer
1
Calculation of gross margin percentage for Year 2:
Formula :
Gross margin % = Gross Margin / Sales
= 633000 / 1500000 =
42.2%
2
Calculation of earnings per share (of common stock) for Year 2:
Formula :
Earning per share = (Net Income - Preferrred Dividend ) / Number of common shares
= (140000 - 270000*10%) /100000 =
$ 1.13
3
Calculation of price-earnings ratio for Year 2:
Formula :
Price-earnings ratio = Market Price per share / Earning per share
= 9.33 / 1.13 =
8.3
Times
4
Calculation of dividend payout ratio for Year 2:
Formula :
Dividend payout ratio = Dividend Per share / Earning per share
= (50000 / 100000) / 1.13
44.2%
(Note : Dividend Per share = Total Dividend / Number of shares = (50000 / 100000)
1
Calculation of gross margin percentage for Year 2:
Formula :
Gross margin % = Gross Margin / Sales
= 633000 / 1500000 =
42.2%
2
Calculation of earnings per share (of common stock) for Year 2:
Formula :
Earning per share = (Net Income - Preferrred Dividend ) / Number of common shares
= (140000 - 270000*10%) /100000 =
$ 1.13
3
Calculation of price-earnings ratio for Year 2:
Formula :
Price-earnings ratio = Market Price per share / Earning per share
= 9.33 / 1.13 =
8.3
Times
4
Calculation of dividend payout ratio for Year 2:
Formula :
Dividend payout ratio = Dividend Per share / Earning per share
= (50000 / 100000) / 1.13
44.2%
(Note : Dividend Per share = Total Dividend / Number of shares = (50000 / 100000)
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