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:

Dividends on common stock during Year 2 totaled $50 thousand. The market price of common stock at the end of Year 2 was $9.46 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.)

Lundberg Corporation's most recent balance sheet and income statement appear below:

Explanation / Answer

1) Gross margin = Gross profit / net sales = $570 / $1430 = 39.9% 2) Earning per share = (net profit after tax - preference dividend if any) / number of shares outstanding 1.10 Preference dividend = 10% of $300000 = $30000 net profit after tax - preference dividend if any = $140000 - $30000 = $110000 3) price earning ratio = market price per share / earning per share = $9.46 / $1.10 = 8.6 4) Dividend payout ratio = dividend paid to common stock holders/ (net profit after tax - prferred dividend) = $50000 / $110000 = 45.5% 5) Dividend yield ratio = dividend per share /market price per share = $0.50 / $9.46 5.3% dividend per share = $50000 / 100000 = $0.50 per share 6) Return on total assets = Net operating income / Average total assets = $241000 / ($1725000 + $1715000) / 2 = 14.0% 7) return on common stockholders' equity = Net profit attributable to common stock holders / average Common stock holders equity = $110000/ $495000 22.2% average common stock holders equity = (825000+765000 - 300000-300000) / 2 = 495000 8) Book Value per share = Common stock holders equity / number of shares outstanding = (825000 - 300000) / 100000 = 5.25 9) working Capital = current assets - current liability = $745000 - $610000 = $ 135000 135000 10) Current ratio = Current Assets / Current Liabilities = $ 745000 / $610000 1.22 11) Acid test ratio = (Current assets - inventory - prepaid expenses) / Current liabilites = ($745000 - $210000 - $25000) / $610000 = 0.84 12) Accounts receivable Turnover = net credit sales / average accounts receivable = $1430000 / ($310000 + $320000) / 2 4.54 13) average collection period = Number of days in a year / accounts receivable turnover = 365 days / 4.54 80.4 14) Inventory turnover = cost of goods sold / average inventory = $860 / (210 + 200)/2 4.20 15) average sale period = 365 days /inventory turn over = 365 days / 4.20 = 86.90 16) Times interest earned = EBIT /interest = $ 241000 / $ 41000 5.88 17) debt to equity ratio = total liabilities / shareholders equity = $900 / $825 1.09

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